Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL (By Order)

Order for Third Reading read.

To be read the Third time upon Tuesday next.

Oral Answers to Questions — ORAL ANSWERS TO QUESTIONS

Mr. Speaker: I appeal to the House once more, that when right hon. and hon. Members are called for a supplementary question, they ask one supplementary question. It is quite unfair to people whose names are a little lower in the list for hon. Members to ask more than one question.

NATIONAL FINANCE

Retail Price Index

Mr. Neubert: asked the Chancellor of the Exchequer whether he will detail those economic factors which will have an upward influence on the retail price index within the next 12 months.

The Chief Secretary to the Treasury (Mr. Joel Barnett): A variety of factors may have an upward influence on the retail prices index over the next 12 months: the level of wage settlements, however, will undoubtedly be of vital importance in deciding whether the index rises, falls or remains around the same level over the period.

Mr. Neubert: Can the Chief Secretary deny that, with inflationary factors already at work in the economy, among which can be numbered the recent expansion in the money supply, the increase in total earnings of 15 per cent. and the rise in mortgage rates, to men-

tion only three, the rate of inflation will be rising again before the end of the year and will go even higher in 1979?

Mr. Barnett: I do not know why the Opposition are always apparently so eager to believe that the rate of inflation will be in double figures. The Prime Minister and the Secretary of State for Prices and Consumer Protection have said that for the rest of this year the rate of inflation will be in single figures. I endorse that view. What will happen next year depends on many other factors.

Mr. Anderson: Will my right hon. Friend confirm that if the Government had not opted to put up the employer's national insurance contribution but had opted for other alternatives, including an increase in VAT, those would have had a more immediate and lasting effect on the RPI?

Mr. Barnett: My hon. Friend is absolutely right. This only shows what we get from the Opposition—on the one hand apparent concern about the rate of inflation and on the other deliberate intent to get us to increase it.

Mr. Tapsell: Does the right hon. Gentleman agree, however, that the three-month annualised rate is in double figures, that the six-month underlying trend turned sharply upwards in April and has continued upwards, and that even the year-on-year trend has only one better month to go before it too turns upwards, on even the most optimistic assumptions about the future movement of commodity prices and sterling?

Mr. Barnett: What I did notice was the way in which the hon. Gentleman deliberately juggled his question. What he has done is take the three-months basis in one case and the six-months basis in another. With the greatest respect, the position is as I have described it.

Price Increases

Mr. Atkinson: asked the Chancellor of the Exchequer if he will appoint a panel of experts to inquire into the reasons why the level of the public sector borrowing requirement or the money supply has had little or no influence over the rate of price inflation during the past five years.

The Chancellor of the Exchequer (Mr. Denis Healey): No, Sir. As to the implications of the Question, I have repeatedly make it clear that the prime task of the Government is the control of inflation and that this depends not only on moderation in pay bargaining but on firm control of the monetary aggregates. The monetary record of the last Conservative Government had a massive impact on the rate of inflation during the last five years. I think that that is now common ground between the two Front Benches.

Mr. Atkinson: Does my right hon. Friend not acknowledge that he has failed to carry with him the Labour movement, and the trade unions in particular, as well as more progressive opinion among economists, and that his fear that increasing Government expenditure will bring rising prices is not borne out by our experience over the last 10 years, when it has been shown that neither prices nor wages have responded to the level of demand?

Mr. Healey: With respect to my hon. Friend, I think that he is mixing up the level of public expenditure with the level of the public sector borrowing requirement and the money supply. If the PSBR cannot be financed without increasing the money supply, that will undoubtedly add to inflation. That, of course, is what happened in 1972 and 1973, when the rate of increase of money supply was twice the rate of increase of GDP.

Mr. Nelson: As the Question refers to the public sector borrowing requirement, and in the light of the reports today that the Greater London Council's loan in Swiss francs may have incurred a foreign currency loss of about £25 million already, does the Chancellor accept that there are very severe lessons to be learned by the Government and other public sector authorities about borrowing abroad? What view does the right hon. Gentleman take about the substantial loss incurred in the case of the GLC loan?

Mr. Healey: That does not have very much reference to the Question on the Order Paper, but I will answer the hon. Gentleman. Of course some foreign borrowing turns out to be very unwise, if the terms and conditions and the currency are not well judged, but it has played a useful role in enabling this coun-

try to survive the impact of the increase in oil prices. I am glad to say that we are now repaying foreign borrowing at a very fast pace.

Mr. Watkinson: Will my right hon. Friend reiterate the point that the crucial factor here is the way in which the public sector borrowing requirement is financed? Does he agree that there have been considerable problems arising out of the undershooting of Government targets for the PSBR? Have any investigations or studies been undertaken to see why this degree of undershooting has taken place?

Mr. Healey: I have done my best to attribute the various elements in the undershoot of the PSBR last year to a number of factors. One was the very much faster fall in interest rates than we had earlier expected; another was the fact that public expenditure was well below the limits that we set; another was the fact that we introduced new ways of refinancing export credit. I am as concerned at the failure of public expenditure to expand as fast as possible as I am with a failure of public expenditure to keep within the limits.

Sir G. Howe: Will the Chancellor address himself to the reasons for concern at what is happening to the money supply in today's circumstances? Will he recognise that it is his responsibility that money supply—M3—grew at over 16 per cent. over the last 12 months, that M1 is growing at a much faster rate, and that he is creating these problems for himself by the size of his borrowing requirement and his very determination to expand public spending by 6 per cent?

Mr. Healey: No, Sir. As always, the right hon. and learned Gentleman is absolutely wrong. The 16 per cent. increase in money supply last year had nothing to do with public expenditure, which was a great deal smaller than expected. In fact, 40 per cent. of the growth in money supply—M3—last year was due to inflows of foreign currency due to the strength of the pound. If it had not been for that, the annual increase in money supply last year would have been 10 per cent. and not 16 per cent. The Swiss money supply figures at the moment are more in excess of their target than ours were last year; so are the German figures. That is having none of the

 
malign effects which infantile monetarists ascribe to it.

Manufacturing Growth

Mr. David Price: asked the Chancellor of the Exchequer in view of the fact that the Government have abandoned their scenario II target for an average annual growth rate of 7·9 per cent. for total manufacturing industry, what is the current growth target for the Government's industrial strategy.

Mr. Healey: The aim of the industrial strategy is to improve industrial performance. There is no overall quantified growth target but many sector working parties have set quantified targets for their own sectors.

Mr. Price: Will the Chancellor assure us that with his abandonment of the scenario III targets—and he has abandoned them—the Treasury has also abandoned its belief in fairy godmothers as a substitute for industrial policy?

Mr. Healey: I regret to say that one cannot believe in fairy godmothers for long if one is Chancellor of the Exchequer. I know that the hon. Gentleman is very concerned with the welfare of British industry and will be glad to know that industrial production rose by 1·6 per cent. in April and that its level in the last three months was 1·3 per cent. above the rate in the three months before that. In other words, our industrial output is now growing at a very satisfactory rate.

Mr. Hooley: Will my right hon. Friend say how the proposed 2·5 per cent. surcharge on insurance contributions will encourage manufacturing industry to expand?

Mr. Healey: My hon. Friend may have missed the news. The increase in the national insurance surcharge is likely to be 1½ per cent. rather than 2½per cent. I pointed out in the recent debate that we had a very rapid expansion in private industrial investment during the last 12 months, which is expected to increase at the same rate this year, despite the fact that that was the year when the 2 per cent. surcharge was in force.

Mr. Lawson: Is the Chancellor aware that as a result of his taxation and

incomes policies, at a time of record postwar unemployment one manufacturer in five is now reporting a shortage of skilled labour? What sort of industrial policy and strategy is that?

Mr. Healey: I know that there are shortages of skilled labour, but that is no consequence of the incomes policy. It may well be the case that under free collective bargaining differentials between production workers and skilled workers, particularly in the engineering area, were compressed, but that has not happened in the past year.

Output

Mr. Radice: asked the Chancellor of the Exchequer if he is satisfied with the growth in output.

Mr. Healey: The latest figures show output growing at 1 per cent. a quarter. The House will share my satisfaction.

Mr. Radice: At least we on the Government Benches welcome those figures. Will my right hon. Friend confirm, however, that they are in line with his Budget forecast?

Mr. Healey: Yes, Sir. If anything, they are slightly ahead.

Mr. Ridsdale: I welcome the increase in output, but is it not disturbing that our competitors, such as America, Japan and West Germany, have outputs far higher than ours?

Mr. Healey: I do not know how fast the German output will grow this year, but I notice that the German Economic Institute estimated that it would grow at about 2½per cent. On that showing, our rate of growth is likely to be higher than Germany's.

Mr. Gould: Would my right hon. Friend characterise that growth as consumer-led or export-led?

Mr. Healey: Some of it is export, some of it is consumption, and. I am glad to say that a good part is capital growth. But, of course, the output is output in Great Britain—in other words, it is generated by the demand for British goods.

Sir G. Howe: Is it not a fact that manufacturing output in the first quarter


of this year was still below what it was during the three-day working week and subsequently below what it was in 1973, and that over the four years of stagnation that the Government have produced, other Governments have succeeded in doing very much better?

Mr. Healey: I pointed out that this year, on current figures, our rate of growth is likely to be somewhat higher than that of Germany, and also somewhat higher than that of France. Our inflation rate is already lower than that in France and may well be level with that in the United States. Considering the problems that this country has had to cope with in a world recession—problems aggravated by our inheritance from the Conservative Government—I think that we are doing quite well and I think that, when the time comes, the British people will take the same view.

Dividend Control

Mr. Budgen: asked the Chancellor of the Exchequer whether he has any plans to renew the powers to control dividends.

Mr. Joel Barnett: I have nothing to add to the reply given to the hon. Member for Stoke-on-Trent, Central (Mr. Cant) on 6th June.

Mr. Budgen: Does the Chief Secretary agree with the evidence given by the Treasury witnesses to the Wilson Committee, to the effect that dividend control has tended to distort the equity market and thus to increase the cost of new capital, which provides new wealth and new jobs?

Mr. Barnett: The hon. Gentleman is quite right. Of course there is something in that, but it must be considered in the wider context of counter-inflation policy.

Mr. Fernyhough: Will my right hon. Friend bear in mind that if capitalism and capital are allowed uncontrolled rewards there is little possibility of labour, through the trade unions, agreeing to wages being controlled?

Mr. Barnett: I am not entirely sure that I would agree with every syllable of my right hon. Friend's comment, but I shall bear in mind what he says.

Mr. Biffen: Did the statement, a week ago, by the Leader of the House, that the

Government had no intention of fresh legislation on this subject, represent Government policy?

Mr. Barnett: The hon. Gentleman should not pick out one or two words from what my right hon. Friend said. He also said that a statement would be made at an appropriate time.

Mr. Ron Thomas: Does my right hon. Friend agree that with all the methods of avoiding dividend control by one-for-one issues, and the rest, all this nonsense about control over dividends is really one of the biggest of myths?

Mr. Barnett: My hon. Friend will no doubt have seen all the figures about the growth of dividends over the last 10 years or so, and will have noted that the actual growth has not been all that great.

Mr. Lawson: Does the Chief Secretary not realise the imperative need for certainty in industry and commerce over this matter? Will he at least give an assurance that, following the gaffe by the Leader of the House, dividend control will either be continued by law or abandoned altogether, and will not be perpetuated by an arbitrary system of blacklisting and economic sanctions?

Mr. Barnett: I will give this assurance to the hon. Gentleman: a statement will be made at the appropriate time.

Building Societies (Composite Tax Rate)

Mr. Stoddart: asked the Chancellor of the Exchequer what was the composite rate of tax charged to building societies for the financial year 1977–78; and how this compares with the likely rate for 1978–79.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): 24¼ per cent. for 1977–78. No estimate of the rate for 1978–79 can be made until the Finance Act is passed fixing the tax rates and allowances for the year.

Mr. Stoddart: Does my right hon. Friend agree that the composite rate of tax is bound to fall substantially this year as a result of the tax changes already made? Does he not also agree that that will bring a substantial financial windfall to the building societies, and, further, that the benefit should be passed on to


those people buying houses? Will he make representations to the building societies to see that house purchasers benefit from this tax windfall?

Mr. Sheldon: As my hon. Friend will know, the composite rate is fixed not only in accordance with the levels of taxation but on the basis of the assessment of those people who invest in the building societies. This falls to be determined, and the outcome should be known by about September of this year.

Mr. Frank Allaun: If the composite rate does fall, does my right hon. Friend agree that the margin between borrowing and lending rates will be too great, and ought to be reduced in the interests of house purchasers?

Mr. Sheldon: My hon. Friend will know that this is always a very sensitive subject, in which the Government are always closely involved. It will be necessary to see the levels of liquidity of the building societies and to make one's assessment in due course, when more information is available.

Mr. Ridley: What does the right hon. Gentleman intend to do about those who invest in building societies but who are not liable to pay income tax, and are charged to income tax by the composite rate and are unable to claim it back?

Mr. Sheldon: I understand that problem, and, in the main, those people who choose to invest in building societies also understand it. Many regard the advantages of the building society—the easy form of long-term investment and the way in which money can quickly be withdrawn when required—as offsetting that disadvantage.

Inflation

Mr. Michael Spicer: asked Mr. Chancellor of the Exchequer in which quarter of 1978 or 1979 he expects the rate of inflation to begin to rise again.

Mr. Joel Barnett: As a result of Government action on pay and prices, the rate of inflation is now likely to remain broadly stable until the end of the year. Beyond that, the outlook depends critically upon the rate of earnings increase after 31st July.

Mr. Spicer: Since every economic commentator, with the exception of the Chief Secretary and the Secretary of State for Prices and Consumer Protection, believes that the rate of inflation will rise at the end of this year, may we assume that the Chief Secretary will be advising his right hon. Friend the Prime Minister to hold a General Election in the autumn, as that may be the last time that the Government will be able to con the people that all is well?

Mr. Barnett: It is certainly not true that all outside, experts—if that is the right word—on these matters believe that the rate of inflation will be in double figures this year. I note the view of Conservative Members, and I also note the hon. Gentleman's urgent desire to test these matters in the country. I shall give appropriate advice to the Prime Minister.

Mr. Ioan Evans: Has my right hon. Friend noticed that in recent years, when we have been talking about the retail price index and inflation, there has been a chorus from Opposition Members referring to 8·4 per cent.? In view of the fact that the figure is now 7·7 per cent., will my right hon. Friend remind us what the figure was when the Conservatives left office?

Mr. Barnett: That is an interesting question, and the figure just happens to be in my mind. It was 13·2 per cent.

Mr. Lawson: Is the Chief Secretary aware that his right hon. Friend the Chancellor of the Exchequer has been quoted as saying that he wants to be to economic forecasters what the Boston strangler was to door-to-door salesmen? Has he informed the Secretary of State for Prices and Consumer Protection of this ambition?

Mr. Barnett: I am sure that my right hon. Friend the Secretary of State for Prices and Consumer Protection will know about the ambitions of every other colleague in the Cabinet.

Banking and Insurance

Mr. McCrindle: asked the Chancellor of the Exchequer what recent discussions he has had with representatives of banking and insurance.

Mr. Robert Sheldon: My right hon. Friend has frequent contacts, both formal


and informal, with representatives of the financial community.

Mr. McCrindle: When the Chancellor of the Exchequer next meets the leaders of the banks and the insurance companies, will he be able to confirm not only that the Labour Party has now no plans for the nationalisation of these concerns but that without a mandate so to do it would not propose, in the unlikely event of being returned to form the next Government, to legislate for the direction of the funds of these institutions, no matter what the Wilson Committee may recommend?

Mr. Sheldon: We have, of course, set up in the meantime the Wilson Committee, which will be reporting, and which is taking a wide degree of evidence. It would be foolish to produce conclusions while so much work has yet to be done, let alone before receiving the report, which we await with great interest.

Mr. Heffer: I trust that my right hon. Friend and the Chancellor of the Exchequer will take note of the decisions of the Labour Party conference in relation to banking and insurance companies. Even if there is not a full-scale public ownership of these institutions, is it not quite clear that the time has come for greater control over them, in order that we can get the investment where it is needed in this country, in a planned and intelligent way?

Mr. Sheldon: I fully understand the point that my hon. Friend is making. I have also noted fully the statement on banking and finance that was made at the conference. The Wilson Committee is at present taking the second part of its evidence—the very interesting part, on the supervision of financial institutions—and will be reporting in due course. That report, together with the vast amount of information that it will bring together, will form the basis of the final plans of the Government in these matters.

Mr. David Steel: Will the right hon. Gentleman assure the banking and insurance world that, whatever the Labour Party conference may say, there will be no encroachment of public ownership on these sectors so long as the Lib-Lab agreement is in force?

Mr. Sheldon: I am not sure of the length of life that the right hon. Gentle-

man has in mind for the Lib-Lab pact, but, of course, I can confirm quite clearly that it is the Government's view that major structural changes in financial institutions are not necessary at the present time.

Mr. Tapsell: Does the Financial Secretary agree that those Labour Ministers and hon. Members who are advocating direction of investment are posing a threat to the ultimate value of the pensions of millions of workers in this country?

Mr. Sheldon: I think that the hon. Gentleman is overstating the case. I do not think that the pension funds and financial institutions are over-worried about that side of these matters; I think that they are interested in seeing the information that is being gathered by the Wilson Committee and the full consideration that will be available in due course.

Pensioners

Mr. George Rodgers: asked the Chancellor of the Exchequer what benefit will accrue to pensioners whose only form of income is the State pension, as a consequence of the Budget amendments carried by the Opposition parties.

Mr. Joel Barnett: None. My right hon. Friend's Budget proposals already ensure that no pensioner whose only income is the standard State pension will be liable to tax this year.

Mr. Rodgers: I thank my right hon. Friend for that emphatic reply. Does he agree that the policies being advocated by Tory spokesmen would lead to millions of pensioners being called upon to pay much more through indirect taxation, particularly VAT? Should this not be widely known in the country?

Mr. Barnett: My hon. Friend is absolutely right, and I am sure that he and I will be seeking to ensure that that is more widely known.

Mr. Tim Smith: What benefit will accrue to pensioners as a result of the increase in national insurance contributions?

Mr. Barnett: If the hon. Gentleman will look at the national insurance contribution increase as an alternative to what the Opposition are suggesting, he will see that it will be much better for pensioners. I


bear in mind particularly that he and his hon. Friends voted for two amendments from which pensioners receive no benefit whatsoever. He and his hon. Friends also suggest that we should increase VAT, which would harm the pensioners.

Mr. Loyden: Will my right hon. Friend therefore give an assurance that not only pensioners but workers who have been responsible, by their constraints, for the lowering of inflation, will not carry the imposition of the deficit which now occurs in the Budget arising out of these Tory amendments?

Mr. Barnett: I note what my hon. Friend says. I can assure him that these points will be borne in mind when we seek to meet the deficit created so irresponsibly by the Opposition.

Mr. Lawson: Is not the Chief Secretary aware that the purpose of cuts in income tax is to restore the incentives and to create fresh incentives, which will get the economy moving again and make Britain more prosperous, so that everyone benefits, incuding the pensioners?

Mr. Barnett: That is an interesting point. It would be even more interesting if anything that the hon. Gentleman and the Opposition did in those two amendments helped pensioners or those on low pay.

Tax Revenue

Mr. Jessel: asked the Chancellor of the Exchequer how much revenue is now expected in the current year from direct taxation; and how much from indirect taxation.

Mr. Robert Sheldon: Taking the proposed increase in the national insurance surcharge into account in conjunction with the Finance Bill, receipts in 1978–79 from direct taxes, including employees' national insurance contributions, are expected to be around £27·9 billion, compared with £29·0 billion from indirect taxes, which include employers' national insurance contributions and local authority rates.

Mr. Jessel: In order to cut income tax substantially and put incentives into the economy, when do the Government intend to try to bring about a really massive shift from direct to indirect taxation?

Mr. Sheldon: The hon. Gentleman will be aware that there has been a considerable movement as a result of the last Budget. I have pointed out that the burden has shifted in the way that I have described. If the hon. Gentleman looks at the figures, he will see that this is so.

Mr. Flannery: Does my right hon. Friend agree that indirect taxation bears most heavily on that section of the community which can least pay? Is that not the policy of the Conservative Party—to make those people who have least pay more? Inside the next few weeks, should that not be made known as widely as possible?

Mr. Sheldon: Certainly it will be my aim to ensure that the information that my hon. Friend has given is made more widely known. Although not as progressive as income taxes, indirect taxes, as a result of certain changes that have been introduced—such as the extension of these zero ratings and certain other changes—are not quite so regressive as they once were.

International Monetary Fund (Quotas Review)

Mr. Higgins: asked Mr. Chancellor of the Exchequer when he expects agreement to be reached on the sixth review of International Monetary Fund quotas.

Mr. Healey: Increases under the sixth review were agreed in January 1976. I hope that it will be possible to make substantial progress on the seventh review at the next interim committee meeting in September.

Mr. Higgins: Does the Chancellor agree that an increase in quotas, as a method of increasing international liquidity, is preferable to an increase in the United States deficit? Will he say whether he will support proposals for a substitution account to deal with the dollar overhang?

Mr. Healey: I certainly agree that one of the most desirable ways of increasing international liquidity, and the lending capacity of the IMF, is an increase in quotas. As the hon. Gentleman knows, I supported the last one, and I shall support a substantial increase now. The IMF is now considering proposals for a limited substitution account which were


made at the Mexico meeting, and I shall certainly support it.

Mr. Radice: While we are on the subject of the IMF, will my right hon. Friend take the opportunity of repudiating the serious charge of deceit made against him by the right hon. and learned Member for Surrey, East (Sir G. Howe) over the question of the standby of June 1976?

Mr. Healey: I am grateful to my hon. Friend for reminding me of that. Yes, I shall. I cannot accuse the right hon. and learned Gentleman of mendacity because parliamentary protocol would forbid it, but on that occasion he did show the familiar fogginess which he has on matters of fact. The day after the standby was negotiated, I told the right hon. and learned Gentleman that
if any drawing on them could not otherwise be repaid on the due date, Her Majesty's Government would be prepared to seek further drawing from the International Monetary Fund."—[Official Report, 7th June 1976; Vol. 912, c. 915.]
I also pointed out, in answer to a supplementary question from my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee), that there were no strings of any sort on domestic policy attached to this short-term facility. In view of the fact that what the right hon. and learned Gentleman said in the House on that occasion was totally untrue, I hope that he will take this opportunity of withdrawing his reckless and deceitful remarks.

Mr. Speaker: Mr. Peter Emery.

Sir G. Howe: rose—

Mr. Speaker: Order. I have called Mr. Peter Emery.

Mr. Emery: Returning to the original Question, in dealing with IMF borrowing, will the Chancellor tell the House what consideration has been given by the Government to the vast amount of United States paper which is being floated on the international market in order to cope with the imbalance of payments in the United States? Will he press the IMF and his European colleagues to make the American Government realise that if this continues it is bound to have an adverse effect on the investment and industrial expansion of the free world?

Mr. Healey: One of the most worrying features in recent years has been the enormous increase in volume of footloose funds in the Eurocurrency markets. One of the five points on which the Governments attending the Bonn Summit are hoping to reach agreement is a means of achieving greater stability in relation to currency. The point that the hon. Gentleman has made is at the centre of our preoccupations.

Sir G. Howe: The House will appreciate how sensitive the Chancellor is on these matters. Will he understand that on the occasion in question he told the House without qualification that there were no strings attached to the drawing which he was then making. Nevertheless, as subsequently appeared, he was bound to apply to the IMF, as he did. His statement stands on the record as one of deceit and not of candour with the House.

Mr. Healey: I hope that when I sit down, Mr. Speaker, you will ask the right hon. and learned Gentleman, if those are the right adjectives by which to describe him, to withdraw a remark which I have just proved to have been totally untrue. Using the same words as I used to my international colleagues on that occasion, I told the House something which the right hon. and learned Gentleman denied that I told the House. I made it absolutely clear in answer to my hon. Friend the Member for Birmingham, Handsworth that there were no strings in relation to domestic policy.

Mr. Lawson: You did not say anything about domestic policy.

Mr. Healey: I made it quite clear that we had agreed to go to the IMF for a further drawing. I shall read out exactly what I said:
If any drawing on them
—that is, the standby facilities—
could not otherwise be repaid on the due date, Her Majesty's Government would be prepared to seek further drawing from the International Monetary Fund."—[Official Report, 7th June 1976; Vol. 912, c. 915.]
In view of the fact that the right hon. and learned Gentleman has now been caught out in a deliberate lie—on the previous occasion he might have pleaded forgetfulness—I hope that you, Mr.


Speaker, will ask him to withdraw his remarks.

Mr. Speaker: Order. Strange as it may sound to the House, I did not hear the Chancellor's last words. Perhaps wrongly, I was my self engaged in conversation. I want to tell the House that the word "deceit", like the word "mendacity"—[HON. MEMBERS: "Lie"]—We shall come to the word "lie". Everyone knows about that. The words "deceit" or "mendacity" applied to any right hon. or hon. Member are unparliamentary expressions. The word "lie" is most certainly an unparliamentary expression. Did the right hon. Gentleman use the word "lie"?

Mr. Healey: I am grateful for your guidance on this matter, Mr. Speaker. I certainly withdraw the word "lie", in view of what you have said. As the right hon. and learned Gentleman has now been caught out twice in making statements at variance with what he knows to be the facts, I hope that you will insist that he withdraws the word "deceit", which he has now used on two occasions.

Sir G. Howe: This exchange could go on for some time. I certainly withdraw the word "deceit", provided the Chancellor withdraws his earlier use of the word "mendacity", so that it can stand on the record.

Public Sector Borrowing Requirement

Mr. Canavan: asked the Chancellor of the Exchequer what is the most up-to-date estimate of the public sector borrowing requirement for the current year.

Mr. Kenneth Lewis: asked the Chancellor of the Exchequer what forecast he can now make on the public sector borrowing requirement up to April 1979.

Mr. Joel Barnett: My best estimate of the public sector borrowing requirement for 1978–79 remains the Budget forecast of £8·5 billion.

Mr. Canavan: Bearing in mind that in each of the last two financial years the Treasury has overestimated the public sector borrowing requirement, will my right hon. Friend take immediate steps to increase public expenditure now in areas such as education, where the educational opportunity of thousands of

children could be improved by employing extra teachers who are otherwise threatened with unemployment? Will he also initiate a more generous school building programme, which will help to provide jobs for some of the 250,000 construction workers on the dole?

Mr. Barnett: With great respect, much as I should want to achieve the objectives set out by my hon. Friend, I doubt whether increasing the borrowing requirement and increasing public expenditure in the way that he described would help either those people or anyone else in the country.

Mr. Powell: If the estimate is the same as in the Budget, what has happened to the effects of the amendments made to the Finance Bill in the course of its passage?

Mr. Barnett: As the right hon. Gentleman will be aware, the Finance Bill is not yet through. We do not yet know whether there will be any change to the Budget Statement of my right hon. Friend the Chancellor of the Exchequer.

Manufacturing Output and Consumer Spending

Mr. Dykes: asked the Chancellor of the Exchequer if he is satisfied with the trend of manufacturing output and consumer spending in the British economy in the first five months of 1978.

Mr. Robert Sheldon: The encouraging growth in both these indicators is fully consistent with a steady improvement in the economy.

Mr. Dykes: I appreciate that that is the only answer that the Minister can give, but is that not the same as saying that as a result of the miraculous economic policies pursued by the Chancellor of the Exchequer in recent painful months, this country now hopes its economy to be 55 per cent. of the size of the German economy at the end of this year, instead of 52 per cent.?

Mr. Sheldon: I am not sure whether the hon. Member was in the House when my right hon. Friend the Chancellor of the Exchequer dealt with an earlier question and pointed out that due to cutbacks in the German economy ours was growing at a very satisfactory rate by


comparison with that economy. That should give considerable satisfaction to the House.

Mr. Molloy: Will my right hon. Friend please note that the finest mark of the success of what my right hon. and hon. Friends are doing in lifting the British economy from the state in which we found it is the constant carping criticism of Tory Members, who become very anguished and upset at the news of any good progress that is made in the name of Great Britain?

Mr. Sheldon: I also see the connection between any good news and the disappointment on the faces of many Opposition Members. It is a feature that we may have to live with for quite a time yet.

Mr. Tapsell: Is it not a deplorable reflection on this Government's handling of the real economy that manufacturing output today is lower than it was when this Government first came to power more than four years ago?

Mr. Sheldon: The hon. Member will have heard the figures for the last month and will be aware that they show very considerable improvements, which we fully expect to be sustained over the period ahead. If the hon. Member is making a comparision with a situation in which the money supply rose by an incredible extent in order to achieve a spurious and temporary productive gain, I should say that our improvement is based on a much firmer foundation than that.

Manufacturing Production and Imports

Mr. Alan Clark: asked the Chancellor of the Exchequer what is the estimate for (a) manufacturing production, and (b) import of goods and services, for the 12 months to mid-1979, based on a projection of existing figures.

Mr. Robert Sheldon: The Government's forecasts of manufacturing production and of imports of goods and services were set out in table 4 of the Financial Statement and Budget Report.

Mr. Clark: Will the right hon. Gentleman tell the House whether that is the main forecast? They were not set out

clearly in the Red Book. They were set out in two alternatives—a normal forecast and a stronger forecast. Is it not a fact that in one case—that of imports—it is a weaker forecast that is likely?

Mr. Sheldon: I do not think that anyone can doubt that the general level of imports is likely to be higher at a time of expansion than at another time, but it is within the capacity of the forecast that we announced, and we should note, too, the improvements in the other indicators that I mentioned, which give rise to a cautious optimism, which I believe to be entirely justified.

Mr. Ron Thomas: Is my right hon. Friend aware that a little more than 10 years ago 30 per cent. of our imports were finished and semi-finished manufactured goods and that now they represent almost two-thirds of our total import bill? As the party which believes in planning and priorities, does not my right hon. Friend think that we should have a planned trade policy rather than leave it to multinational companies and the market mechanism?

Mr. Sheldon: I shoud be more convinced by that statement if I believed that as a result of that we would see a significant amount of investment over such a short period of time. I accept my hon. Friend's point about the high level of manufactured imports. This is a general consequence in most industrialised countries. We need to see that our levels of manufactured exports increase to compensate for this.

Mr. Raison: Is there yet any glimmering of improvement in output per person employed in manufacturing industry, which has been such an abysmal feature in the past four years?

Mr. Sheldon: I have not the latest figures before me. However, the hon. Member will know that I gave the improvements in production as a whole and, bearing in mind the steady level of employment, that obviously presupposes an improvement in productivity, which we must hope will continue and improve still further.

Mr. Ioan Evans: Has my right hon. Friend seen the predictions made in one of the forecasts today about future unemployment? Should not the Government


look seriously at the possibility of selective import controls to deal with certain industries, such as our electronics industry? Is not this action which the Government will have to take in the end?

Mr. Sheldon: We have been active in promoting selective import controls in certain areas, and there are others that can be looked at from time to time. However, in the main, generalised import controls have been reduced both by international organisations and by Britain.

PRIME MINISTER (ENGAGEMENTS)

Mr. Terry Walker: asked the Prime Minister if he will list his public engagements for 29th June.

The Prime Minister (Mr. James Callaghan): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others.

Mr. Walker: Will my right hon. Friend find time in a very busy day to reflect further on the talks that he had earlier in the week with American aircraft manufacturers? Does he appreciate that all those who want to see the development of the British aircraft manufacturing industry will be very pleased that he had those talks? Will he consider making a statement about his talks with the McDonnell Douglas Company, because it is very important that we hear the offer being made to Britain by the Americans?

The Prime Minister: I am obliged to my hon. Friend. The talks were valuable, certainly to me, and they revealed that there is a very big and rapidly growing market for air transport, especially in the United States. We shall have some difficult decisions to take as between the three corporations that we have, and certainly the facts must be laid before the House. I understand that my hon. Friend has the opportunity of a debate quite soon. If he chose this subject, I—and I am sure this applies to the Ministers concerned—would welcome it.

Mrs. Thatcher: Will the Prime Minister say whether his Government have finally made up their minds about their Budget and, if so, exactly what changes

they propose? Is not the only firmness shown so far his support for policies of high taxation and his determination to persist with a levy that will put a tax on exports, a tax on jobs, and a tax on food?

The Prime Minister: We made up our minds about the Budget in April. Unfortunately, we could not carry the House wholly with us on every proposal. However, if the right hon. Lady is now repenting of her vote and wishes to go back to the position that we announced in April, I shall be very happy to do that. As for the rest, I must say that it is very odd to say that we are in favour of high taxation, considering that over the last two Budgets we have reduced it steadily.

Mrs. Thatcher: Does the Prime Minister remember saying from that Dispatch Box a few weeks ago that the tax changes that the Opposition had chosen would reduce unemployment, whereas the tax changes that he had chosen will increase unemployment? Why does he persist in policies that increase unemployment, one of which is tax and the other defence policy, which has already cut jobs by 180,000?

The Prime Minister: As I have answered the right hon. Lady's first question, I quite understand her now moving on to another and entirely different one. I dare say that if she goes on biting for the entire 15 minutes of Prime Minister's Questions, she will score a scratch somewhere. The Government's economic policy is well understood in the country, and it is meeting with increasing satisfaction there.

Mr. Freud: In his busy schedule will the Prime Minister find time to visit the Cafeteria, where the loyal and unhappy staff have been ordered by their unions to strike, which does little credit to the House of Commons in general? Will he consider opening the catering facilities of No. 10 Downing Street to right hon. and hon. Members who are deprived of catering?

The Prime Minister: I cannot say that I entirely recommend the second proposal. Hon. Members might find themselves a little hungry now and again. On the catering facilities generally, I have no comment to make, as I have not studied the matter. I am sure that the Lord President will make a statement if necessary.

Mr. Jay: To be fair, are not the efforts of the Tory Opposition to unbalance the Budget this summer entirely consistent with their profligate financial policies of 1972–73?

The Prime Minister: Yes, but the Opposition show no signs of recalling that or learning from that, as is shown by their attitude to wage increases and to industrial relations generally.

TUC AND CBI

Mr. Noble: asked the Prime Minister when he expects next to meet the TUC and CBI.

The Prime Minister: I met representatives of the TUC and CBI when I took the chair at a meeting of the NEDC on 1st February. Further meetings will be arranged as necessary.

Mr. Noble: When my right hon. Friend next meets the TUC and the CBI will he remind them that the scale of tax cuts proposed by the Opposition could be achieved only through cuts in public expenditure, which would be damaging to industry, to the regions and particularly to the lower-paid? Will he also remind them that their chances of consultation on these matters would be very remote if the Opposition were in power, in view of the fact that the former Shadow Foreign Secretary has indicated that the Leader of the Opposition refused to consult him on foreign affairs? Is that not indicative of the contempt in which she holds everyone who happens to disagree with her?

The Prime Minister: I do not wish to comment on the internal relationships on the Conservative Front Bench, past or present. There are too many painful sores there.
On the general position, the country will have to make up its mind how far it believes that cuts in taxation, which would have a damaging effect on employment throughout the country, would be worth while. We take the view that if there is a choice betwen tax cuts for the better-off and jobs for those who are out of work, we choose the second.

Mr. Cormack: Before the Prime Minister next meets the TUC and CBI will he reflect that it is now nine years since

he sabotaged "In Place of Strife"? In those nine years the purchasing power of the pound has fallen by 65p and there are another 800,000 people out of work. Does he think that the price that the country has had to pay for him as leader is worth it?

The Prime Minister: The answer to the last part of the question is definitely "Yes".

Mr. Wrigglesworth: asked the Prime Minister when he expects next to meet the TUC and CBI.

The Prime Minister: I refer my hon. Friend to the reply which I have just given to my hon. Friend the Member for Rossendale (Mr. Noble).

Mr. Wrigglesworth: Will the Prime Minister discuss with the TUC and the CBI the development of the Government's regional policies? In the Northern Region we have once again the highest level of unemployment in the country, excluding Northern Ireland. Is he aware that on Teesside, despite the highest levels of investment and productivity, there is still severe unemployment? Will he consider carefully the suggestion of the Cleveland County Council and the North of England Development Corporation for the introduction of selective assistance to employment intensive industries and for help to service industries in the northern area?

The Prime Minister: I am aware that the North-East has suffered particularly, because of the structural decline in industries such as coal, steel and shipbuilding. Opportunities for the expansion of service industries should be considered. I believe that the Minister of State, Department of Industry met the Cleveland County Council recently, and he has written the council a long reply in response to its representation. Perhaps I could ask my hon. Friend to study that reply.

Mr. Gow: When the Prime Minister next meets the TUC will he remind trade union leaders of his own words when he said that he would find it "intolerable and not at all acceptable" that people should lose their jobs because of their political opinions? How does he reconcile that advice with the dismissal by British Rail, without compensation, of 42


employees, two of whom have 39 years of faultless service?

The Prime Minister: I am not aware of this. Is the hon. Member referring to new dismissals, or is this an old issue?

Mr. Gow: Forty employees who had been employed when the closed shop came in were dismissed, and two were dismissed when they resigned from the union after the closed shop agreement came in.

The Prime Minister: This issue has been debated on numerous occasions. It does not alter my general view that people should not be dismissed for their political opinions. However, I am not going into a particular dispute on this matter, any more than I shall do on any others.

PRIME MINISTER (ENGAGEMENTS)

Mr. Canavan: asked the Prime Minister if he will list his official engagements for 29th June.

The Prime Minister: I refer my hon. Friend to the reply which I gave earlier today to my hon. Friend the Member for Kingswood (Mr. Walker).

Mr. Canavan: Will the Prime Minister find time today to give an assurance that the Government will do everything possible next week to repair the damage done to the Scotland Bill by the House of Lords? Does he agree that one of the many advantages of the Scottish Assembly will be that devolved legislation will not have to go through the House of Lords, where many a good Bill has been wrecked beyond recognition by a crowd of political vandals and hooligans?

The Prime Minister: I can promise my hon. Friend and the House as a whole that the Government intend to ensure as far as possible that the Scotland Bill will be on the statute book by the end of the current Session. The House of Lords has behaved irresponsibly in a number of matters, but I look to the House of Commons to put them right.

Mr. Tebbit: On an earlier question the Prime Minister made the silly statement that Tory tax cuts benefited only the rich and would not do any good for

the men and women who were out of jobs. If that is so, why is he on the record as saying on 8th June in column 366 of Hansard "The Tory tax cuts will reduce unemployment"? When was he right and when was he wrong?

The Prime Minister: The hon. Member has quoted me incorrectly. I said that if it was a choice between tax cuts and—

Mr. Tebbit: No.

The Prime Minister: It is no use the hon. Member shouting "No". I know what I said. I said that if it was a choice between tax cuts and seeking jobs we would choose jobs. I do not know what the hon. Member would do, but that is our attitude. Of course it is true that there would have been a small reduction in unemployment as a result of tax cuts, but if we had been able to stick to our original Budget there would have been no change at all and unemployment would have fallen further.

Mr. Heffer: On the matter of silly statements, does the Prime Minister agree that statements from the Conservative Front Bench, particularly in speeches in the country, are becoming increasingly silly every day? Does he further agree that we have had a speech by the hon. Member for Abingdon (Mr. Neave) which suggested that we on the Government side of the House are Nazis, and we have had speeches by the Leader of the Opposition suggesting that we are trying to bring about an East European State? Does he agree that the silliest speech of all was by the right hon. and learned Member for Surrey, East (Sir G. Howe), who wants to set up some sort of spiv outfit in the inner cities?

The Prime Minister: I am not sure whether the most dangerous speech has not been the one in which the Leader of the Opposition promised free collective bargaining for private industry but suggested that public industries should be kept within some sort of cash limits. If she really does not understand the degree of comparability between skilled workers in public industry and those in private industries I am sure that if she ever has any responsibility, she has a wonderful disillusionment coming.

Mr. Churchill: Will the Prime Minister earn his award for statesmanship by


repudiating the harebrained suggestion of his Foreign Secretary that the multi-racial security forces of Rhodesia should be stood down and replaced by the terrorist thugs of Mr. Mugabe, who continue to slaughter black and white civilians alike in Africa? Is it still the Government's policy that they should go ahead along those lines?

The Prime Minister: Yes, Sir. There is no change in the policy. It is important that those who are engaged in fighting outside the country and who at the same time are members of that country should be brought into reconciliation with the forces that exist inside the country. There will be no long-term peace in Rhodesia until that is achieved. That is the situation which the country must follow up. I hope that the Opposition will give some support to the idea of getting the two groups together if blacks and whites in Rhodesia are to have a future.

BUSINESS OF THE HOUSE

Mrs. Thatcher: Will the Leader of the House please state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 3RD JULY—Supply [27th Allotted Day]: until about 7 p.m. a debate on the threat to patients from disputes in the National Health Service, on a motion for the Adjournment.
Afterwards, the Ulster Unionists have chosen to debate, on a motion for the Adjournment, rural planning in Northern Ireland, when the Cockcroft Report will be relevant.
Proceedings on the Representation of the People Bill.
Remaining stages of the Theft Bill [Lords].
TUESDAY 4TH JULY—Supply [28th Allotted Day]: a debate on an Opposition motion on employment.
Motion supplementing the Order of the House of 16th November last relating to the Scotland Bill.
WEDNESDAY 5TH JULY—Progress on the Report stage of the Finance Bill.
Consideration of Lords amendments to the State Immunity Bill [Lords].
THURSDAY 6TH JULY—Consideration of Lords amendments to the Scotland Bill.
FRIDAY 7TH JULY—Motions on the Appropriation (No. 2) (Northern Ireland) Order and on the Northern Ireland (Financial Provisions) Order.
MONDAY 10TH JULY—Consideration of Private Members' motions until 7 o'clock.
Afterwards, debate on EEC document R/1577/78 on the 1979 preliminary draft budget, when documents R/1104/ 78 and R/519/78 will be relevant.

Mrs. Thatcher: May I put two points to the right hon. Gentleman? First, will he give more information on the guillotine motion on Lords amendments to the Scotland Bill? How many days are to be provided, and when shall we see the motion? Secondly, will he undertake to provide a day before the House rises for the Summer Recess to debate Rhodesia, a situation that looks very urgent?

Mr. Foot: On the second matter, I think that we must see how we proceed in these matters generally. The House debated Rhodesia a few weeks ago, but I note the right hon. Lady's representations.
On the subject of the timetable motion on the Scotland Bill which is to be taken on Tuesday, I can tell the right hon. Lady that the motion will be tabled on Monday. We have been giving some consideration to the amount of time that we should provide and we were thinking of two or three days. [HON. MEMBERS: "Oh."] We thought that probably three days would be the more satisfactory arrangement.

Mrs. Thatcher: But if the motion is not to be tabled until Monday, we shall not have proper chance to amend it. With respect, I believe that the motion should be tabled in time to give hon. Members the chance to amend it and to state that that is the case on the Order Paper.

Mr. Foot: I think the right hon. Lady will find that she will have an opportunity to amend the motion, if she wishes. The proper and normal course is that we should proceed in dealing with Lords amendments in the way we are doing.

Mr. David Steel: Still on the subject of the Scotland Bill, will the Leader of the House confirm that the other place took exactly the same time as we took, but discussed the whole Bill, whereas we discussed only parts of it because of the delaying tactics of certain Members of the House? [HON. MEMBERS: "No."] Will he confirm that the timetable motion will be arranged so that it is possible to ensure that on this occasion the House will be able to debate those parts of the Bill that were not discussed on the previous occasion?

Mr. Foot: I believe that we should seek to make arrangements so as to satisfy the right hon. Gentleman on the second matter he mentioned. As for any reference to delaying tactics in previous discussions, the right hon. Gentleman and the House know how hesitant I always am to make any charges of delaying tactics against hon. Members in any quarter of the House. I should not on this occasion like to start discussion on an acrimonious note.

Mr. Hugh Jenkins: May I draw the attention of my right hon. Friend to Early-Day Motion No. 422, which has been signed by 174 Members drawn from all parts of the House and which calls for an independent public inquiry into hormone pregnancy test drugs? Will he ask the Secretary of State for Social Services to make a statement to the House next week announcing that he has decided to set up this inquiry? I am not seeking to pre-empt the situation. I am merely asking for it to be looked into.
[That this House notes that children have been born with serious deformities due to hormone pregnancy test drugs; that no official warnings were issued about these drugs until eight years after the first reports indicating the possible dangers; that some doctors continued to prescribe the drugs for pregnant women after official warnings of the Committee on Safety of Medicines; that the Department of Health and Social Security have continuously rejected requests for an inquiry into these matters; and now calls upon the Secretary of State to set up an independent public inquiry.]

Mr. Foot: My right hon. Friend the Secretary of State for Social Services, in considering the matter so far, has not

taken the view that a public inquiry is the best way to proceed. I gather that the matter has been raised on a number of occasions in parliamentary Questions. The Government have been seeking to provide all the information we can. However, I shall take into account my hon. Friend's representations, without making any specific undertaking. I shall discuss the matter with my right hon. Friend as soon as I can.

Sir David Renton: Does the right hon. Gentleman agree that the number of days required for consideration of the Lords amendments to the Scotland Bill must depend to a considerable extent on whether the Government agree to accept amendments? In formulating the timetable motion and in presenting it to the House, will he bear that in mind and let the House know, when this matter is debated, how many amendments the Government will accept so that we may form a proper judgment?

Mr. Foot: That is a reasonable point of view. I assure the right hon. and learned Gentleman that we are approaching the matter in that same reasonable spirit.

Mr. Greville Janner: Will my right hon. Friend say whether the House will have the opportunity to discuss the problems of the restoration of the powers which were taken away from many of our great cities and put in the hands of counties? Is that matter to be left over until the autumn, or will the House have the opportunity to discuss it before the Summer Recess?

Mr. Foot: I cannot promise my hon. and learned Friend that we shall discuss that matter in the next few weeks. During this period there are considerable pressures on Government and parliamentary time. I have sympathy on the major matter of policy which he mentioned, particularly in view of the shameful outrage perpetrated on my native city of Plymouth by that proposal. I assure him that I approach the subject with great sympathy.

Mr. Powell: Does the right hon. Gentleman still hope, despite the absence of co-operation from the Opposition, to arrange for a debate before the House rises for the Summer Recess on the consequences of New Commonwealth immigration, which will give the Opposition


the opportunity to confirm on the Floor of the House that their policies in this respect would have no effect on the prospective future size of the New Commonwealth population?

Mr. Foot: I have not received any representations from the right hon. Lady on this subject.

Several Hon. Members: rose—

Mr. Speaker: Order. May I tell the House, before I call any further hon. Members on business questions that we are to have a shortened debate on the subject of pharmacists? There are to be four Front-Bench speakers in that shortened debate. I hope that that fact will be borne in mind while we are dealing with business questions.

Mr. Abse: May I draw the attention of my right hon. Friend to the Prayer against the Health and Safety (Genetic Manipulation) Regulations relating to genetic engineering? Since three reports since 1975 have been submitted to Parliament, none of which has been debated, and since there has been no public statement of any kind on the matter—which, despite the boon it could bring, could also produce tremendous hazards—will he discuss with the Secretary of State for Social Services whether we could have an hour-and-a-half debate on the regulations?

Mr. Foot: I acknowledge the importance of the regulations to which my hon. Friend refers, but, as I have said earlier in reply to other supplementary questions, we are pressed for time in the coming few weeks. I cannot promise a debate on the regulations in the House itself, although the matter could be debated upstairs. I know that that suggestion is not always regarded as satisfactory, but I hope that my hon. Friend will examine that possibility before we consider any other alternative.

Mr. du Calm: When does the Leader of the House expect to make a statement on updating of Members' remuneration within the Government's present guidelines? Is the right hon. Gentleman also aware that there seems to be increasing support for the proposal made by the right hon. Member for Anglesey (Mr.

Hughes) and myself, among others, that the wise way of dealing with the matter in the long term may be to re-establish the Boyle Committee and to see that its recommendations are continuously updated with a view to the Government that comes in after the next General Election being obliged, if necessary with phasing, to implement the recommendations in full?

Mr. Foot: I have had representations from the right hon. Gentleman, my right hon. Friend the Member for Anglesey (Mr. Hughes) and others. It may be that, on the second matter raised by the right hon. Gentleman, that will be the way for us to proceed. I am sure that all these matters will be discussed when we have the resolutions on Members' pay before the House. I doubt whether a statement will be necessary before then. The debate on the resolutions which are required will be the best way to proceed. The other matters mentioned by the right hon. Gentleman will be relevant at that time.

Mr. Ashley: Is my right hon. Friend aware that I am amazed at his answer to my hon. Friend the Member for Pontypool (Mr. Abse) that he probably could not find time to discuss genetic engineering experiments? Is he aware that these experiments have been compared in importance with the splitting of the atom and that we badly need safeguards, which do not exist at present, laid before the House? If we cannot discuss this vital question in the next few weeks, the House should not be sitting at all. Will my right hon. Friend kindly reconsider his answer and take account of the important nature of this subject?

Mr. Foot: I am not, in any sense, diminishing the importance of the subject. That was not my intention in my reply to my hon. Friend the Member for Pontypool (Mr. Abse) and no one could have construed my answer in that way. There are provisions on how we may have debates on such matters, but the House can decide how debates take place and private Members also have their rights in this respect. The House should not get into the attitude of thinking that private Members who wish to raise matters in private Members' time are not raising important subjects.

Miss Harvie Anderson: Does the Lord President consider it appropriate so to arrange the business for next Thursday as to demand the presence of Scottish Members at Westminster when he knows that they have been commanded by the Head of State to be in Edinburgh?

Mr. Foot: I fully accept that there are difficulties in the provision of time, but arrangements can be made between hon. Members to overcome some of these difficulties.

Miss Harvie Anderson: No.

Mr. Foot: The House must understand that the business of the House must take precedence.

Miss Harvie Anderson: Oh!

Mr. Foot: That has always been my understanding. We have sought to provide as much time as possible between the conclusion of the discussion in another place and the bringing forward of the Bill in this House. That is why we propose the debate for next Thursday. We were taking account of the requirements and convenience of hon. Members in all parts of the House who will wish to take part in the debates on the Lords amendments.

Mr. Kilroy-Silk: Can my right hon. Friend confirm the report in The Times today that the Government have seen sense and are scrapping their ineffectual White Paper on the reform of the Official Secrets Act and substituting a much more sensible and far-reaching freedom of information Act?

Mr. Foot: I must ask my hon. Friend and others to look at the White Paper when it is published before passing judgment on the matter. I certainly will not pass judgment on a report in The Times.

Mr. Geoffrey Finsberg: When the Lord President is preparing his Business Statement for next Thursday, will he see whether he can find time to honour his undertaking that the House will be able to debate the Services Committee report on the new parliamentary building before the Session ends?

Mr. Foot: I do not think that I promised that we could debate that before the end of the Session. I said that we would look at the possibilities. If the hon.

Gentleman looks at my reply last week, he will see that I was guarded enough not to give such an undertaking. I agree that it would be highly desirable to have a discussion on this matter, but there is a long list of highly desirable subjects that I am sure the House would wish to discuss and we have only just about one month left to get in all those debates.

Mr. Roy Hughes: May I draw my right hon. Friend's attention to the serious situation that is developing in the steel industry over the proposed closure of the Bilston and Shelton steelworks and the fact that next week we are to have the annual statement of accounts of the British Steel Corporation? Could the Lord President therefore arrange for an early debate on these important matters?

Mr. Foot: I certainly acknowledge that they are important matters, but, as my hon. Friend is fully aware, there have been a number of opportunities in the House in the past two or three weeks for debates on the steel industry generally. Such a debate would have been in order on those days.

Mr. Higgins: Is the Leader of the House aware that the chairman of the Advisory Council on the Penal System, whose report this week advocated a reduction in the length of maximum criminal sentences, said that she hoped that this would influence the courts in advance of legislation? In view of the grossly irresponsible nature of some of those recommendations against the background of rising crime in this country, should not the House debate the report immediately so that we can express our views?

Mr. Foot: I cannot promise an early debate on the report, but I note what the hon. Gentleman has said.

Mr. Palmer: When considering whether to allocate time to the discusssion of genetic engineering on the Floor of the House, will my right hon. Friend bear in mind that the Select Committee on Science and Technology is at present investigating the subject?

Mr. Foot: I am grateful to my hon. Friend for bringing that fact to the notice of the House.

Mr. MacKay: Bearing in mind the atrocities committed in Rhodesia last


week by the Patriotic Front, is it not irrelevant for the Lord President to say that we had a debate on Rhodesia three weeks ago? Are not these major new developments so important that the country will expect us to be discussing them in the very near future? Will he reconsider his answer to my right hon. Friend the Leader of the Opposition and arrange for a debate next week?

Mr. Foot: I cannot arrange for a debate next week and I do not think that the right hon. Lady asked for that. I certainly do not think that my reply was irrelevant. We had a debate on the subject and many of the considerations were discussed by the House at that time. I said that I would take into account the right hon. Lady's representations, but that was not a commitment and I am sure that she appreciates that fact.

Mr. Raphael Tuck: Has my right hon. Friend considered Early-Day Motion No. 252, which has been signed by a good number of hon. Members on both sides of the House? Can he give us a debate on the subject or make a statement about it?
[That this House notes that when an honourable Member voluntarily decides not to seek re-election to the House of Commons he receives no redundancy pay at all and in many instances does not qualify on the grounds of age for a pension; considers that there is a glaring anomaly in as much as an honourable Member elected in February 1974 and defeated in October 1974 received three months' salary, while other honourable Members can have served 20 years or more and who, on grounds of ill health, age or for personal reasons, decide not to contest the next election do not receive a penny after polling day; and urges the Government to take urgent steps to rectify this matter at once.]

Mr. Foot: I am not sure whether that motion is in the book yet. If not, I shall certainly look at it. If I have made a mistake, I apologise to my hon. Friend in advance.

Mr. Stephen Ross: Is the Leader of the House aware of the growing concern over the challenge to our national heritage? If there is not time for a debate on the subject, can he please make a

statement to the House on the report of the Expenditure Committee on the future of the Land Fund? This is a matter that requires an urgent decision by the Government.

Mr. Foot: I shall certainly see whether there is a requirement for a statement on this subject, but I should have thought that it was a matter which hon. Members themselves could choose to debate.

Mr. English: Is it true that the cause of the present dispute between the House and its catering staff is that the latter seek pensions and other conditions comparable with those of catering staff who serve the Government across the road? If so, what is my right hon. Friend doing to solve the dispute?

Mr. Foot: I am grateful to my hon. Friend for raising this matter. I have no doubt that hon. Members in all parts of the House are very concerned about it. I apologise for the great inconvenience that is being caused to hon. Members throughout the House by what is happening. The House will be aware that there is disruption. I very much regret that it has occurred and that I cannot say whether services can be restored today. I met the appropriate union representatives yesterday as soon as I heard details of the dispute, and I expressed the view that I should be glad to have a further meeting with them. I shall be glad to do that today or tomorrow. We must try to get the dispute into some orderly procedure, and if my hon. Friend can assist in that process, I shall be very grateful. I am eager for the dispute to be discussed in a proper way. I shall do everything that I possibly can to try, with the persons concerned, to get the resumption of proper facilities for hon. Members.

Mr. Fell: On a point of order, Mr. Speaker. Surely the answer given by the right hon. Gentleman was in the nature of a statement. If an answer is given in that way, it makes it difficult to question the right hon. Gentleman. Surely the right hon. Gentleman should make a statement to the House in the usual way.

Mr. Speaker: From my point of view it was a rather long answer, that is all.

Mr. Foot: I was responding to my hon. Friend the Member for Nottingham, West (Mr. English), who asked me a question.


I have not given any notice of a statement. I thought that I was meeting the desire of the House in responding to the question put by my hon. Friend. I have indicated that I am eager to do everything possible to overcome the dispute. However, we must adopt the proper and normal procedure properly to solve the dispute.

Mr. English: Further to the point of order, Mr. Speaker. Will my right hon. Friend now answer my particular point —namely, whether the staff are seeking conditions comparable with those of civil servants catering over the road for members of the Government?

Mr. Speaker: Order. I do not think that the House wants to debate the matter now. It is up to the Lord President whether he replies.

Mr. Foot: I do not think that we should debate the matter now. However, I say to my hon. Friend that I am not prepared to pass judgment on the comparability of others working in other places until we have gone into the issue in proper detail and used the proper procedure. I believe that that is in the interests of hon. Members and of those who serve the House in this respect.

Mr. Fell: Further to the point of order, Mr. Speaker. It is not good enough. The right hon. Gentleman has made what is tantamount to a statement, but he is not able to be cross-examined because he has made it in answering a question on business.

Mr. Speaker: It was an answer to a question. I am afraid that we must leave the matter there.

Mr. Ronald Bell: On a point of order, Mr. Speaker. It does not follow the point of order of my hon. Friend the Member for Yarmouth (Mr. Fell). Should there not be a statement on the dispute? How are hon. Members to know the nature of the arrangements or disarrangements? I am told that there is a little bit of paper pinned up somewhere. Is that the only way in which the House is to be informed of the interruption in its activities?

Mr. Foot: I thought that I was replying to a question put to me perfectly courteously by my hon. Friend the Member for Nottingham, West. I thought

that I dealt with it in a reasonable way. If hon. Members think that thereby they are being denied the opportunity to put questions to me, I shall make a brief statement at the end of my remarks so that hon. Members may question me further. I hope that they do not thereby think that I have a major statement to make, because I have not. I have already said everything that I think it wise to say at present.

Several Hon. Members: rose—

Mr. Speaker: Order. If we are to have a statement at the end of business questions, bearing in mind the further business, I hope that everyone will be very brief.

Mr. Tebbit: I revert to business questions. Does the right hon. Gentleman recollect that last week he inadvertently, perhaps, suggested that there would not be legislation to continue the Government's statutory control over dividends? The Chief Secretary to the Treasury, today said that there would be a statement, as statutory controls expire within five weeks. There is now considerable uncertainty. Assuming that the Cabinet is agreed on what it should do, will the Lord President arrange for a statement to be made next week?

Mr. Foot: It may be that the best way to proceed is by a statement next week. I am fully aware of the date to which the hon. Gentleman refers, but at present I do not have anything to add.

Mr. Ioan Evans: I draw my right hon. Friend's attention to the guillotine measure on the Scotland Bill. There are a large number of amendments coming from another place on clauses that we have not debated in this place. Will my right hon. Friend consider the possibility of having short debates on the amendments and having some time limit on speeches so that there may be a wide expression of opinion in the House?

Mr. Foot: My hon. Friend must not tempt me. If we were to have a timetable motion on his speeches, there would be plenty of time available for other business. Motions containing provisions for stopping hon. Members from speaking are very serious matters and would involve a major interference in the rights of Back Benchers. I shall not be tempted in that direction.

Mr. Marten: Early-Day Motion No. 501 is headed by hon. Members representing six different parties and calls upon the Spanish Government to open the frontier with Gibraltar. As the issue is merely a legacy of the Franco regime, may we have a debate on this absurd situation this week, or shortly before we rise?
[This House calls upon the Spanish Government to open the frontier with Gibraltar.]

Mr. Foot: I hope that the situation will be solved as reasonably as possible in the interests of the people of Gibraltar. I am sure that in that respect I agree with the hon. Gentleman. However, I cannot promise an early debate. I am not sure whether that would be the best way of securing the aim that we have in common.

Mr. Gow: Will the right hon. Gentleman tell the House when we may expect the Government to publish their Bill giving increased parliamentary representation to Northern Ireland?

Mr. Foot: The hon. Gentleman has put that question many times before. I do not think that we shall be able to carry through that measure in this Session, but I shall consider further its publication. I believe that the House is fully aware of the situation. We have not raised any false hopes and we have lived up to the promises that we made.

Mr. Budgen: I remind the right hon. Gentleman that the House has debated the general issue of immigration on only two occasions since the General Election —on 24th May 1976 and 5th July 1976. If those are to be the only two occasions for general debate on the subject between the two General Elections, does he think that the House is fulfilling its proper parliamentary function of discussing the issues of concern to the nation?

Mr. Foot: I am not objecting to the possibility of having a further debate on immigration. I agree with what the hon. Gentleman says and what the right hon. Member for Down, South (Mr. Powell) has implied. Obviously, it is a matter of great public interest, so we must consider whether we should have a debate. However, it is not only the Government who make these arrangements.

Mr. Peter Bottomley: Given the Prime Minister's interest in my right hon. Friend's speech on the future of pay, given my interest in the Prime Minister's view on the future of pay and given the Lord President's statement on Tuesday that a statement would come in due course, when will a statement be made? Will it come before the present stage of the pay policy runs out, and will there be a debate on pay?

Mr. Foot: Obviously, that is another matter of major concern. At this moment I am not prepared to give an unqualified description of what is meant by "in due course". It is a useful phrase and we must preserve it in all its catholic meanings.

HOUSE OF COMMONS (CATERING SERVICES)

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I should like to inform the House that I have nothing to add to the statement that I made earlier about the disruption of the catering services of the House. I do not mean that in any way disrespectful to the House. I fully accept that it is extremely inconvenient to the House that there should be disruption of the catering services.
As soon as I heard the grounds and difficulties that led to yesterday's action, I called for a meeting. We had a meeting. I am prepared to have another meeting.
I underline again that in the interests of hon. Members, of those who serve the House and of those who have momentarily withdrawn their services, I believe that the best way in which to proceed—I hope that we shall have the assistance of all hon. Members—is by trying to get the issue back into the proper and normal method of procedure for dealing with such disputes. As soon as we can do that I think that we can make progress.

Mr. Fell: The right hon. Gentleman is being very reasonable, as he always is in all things. He will realise that there are extremely good relationships between hon. Members and the staff. I believe that that is so in all parts of the House. However, such an affair cannot but weaken the good relationships that exist between the staff and hon. Members.


Therefore it is a matter of the greatest urgency. Will he now inform us what is happening? We have not yet been told what is happening. There are many rumours. One rumour is that the Treasury is holding up the whole thing. If that is true, will he have some influence on the Treasury to stop holding up the matter? What is going on? May I conclude—

Mr. Speaker: Order. Surely that is enough of a question. It is a time for questions and not debate. Mr. Fell, to conclude.

Mr. Fell: May I conclude by saying that I hope that the right hon. Gentleman is, as he says, seized of the importance of the matter?

Mr. Foot: I assure the hon. Gentleman that I am.

Mr. English: I am sure that my right hon. Friend will have any assistance that hon. Members can give him. Will he confirm that, for example, a chef, who I believe is not actually on strike, somewhat regrettably, when he retires after 40 years' service, will get no pension, whereas, if he worked for the Government Catering Department, he would? If that simple matter is one of the causes of the dispute—my right hon. Friend refused to confirm that it was—does he not think that it should be speedily and straightforwardly settled on the simple basis that our staff are entitled to treatment as good as that accorded to civil servants over the road?

Mr. Foot: Because I do not believe that is the sensible way to get this matter settled, I do not think that I should reply to the question in the way in which my hon. Friend put it. When industrial disputes take place it is necessary to have some system whereby they can be resolved—and resolved speedily. I want to get this dispute resolved speedily. I do not believe that the way to get disputes resolve speedily is to have pronouncements made in the House on all these various matters. I hope that those concerned will be prepared to discuss the matter in the way that I have suggested. I assure the House that immediately I heard about this dispute yesterday I offered to have the meeting. I had the meeting and I stand ready to have further meetings either today or tomorrow to overcome the dispute.

Several Hon. Members: rose—

Mr. Speaker: I propose to call one Member from each side.

Mr. Shersby: Will the Lord President bear in mind that Members have entered into commitments with their constituents in many cases for dining engagements in the House next week? Will he therefore make arrangements, if possible, to advise Members at the earliest possible moment whether catering services will be restored to normal as from Monday next so that constituents and others will not be unduly inconvenienced?

Mr. Foot: That is another aspect of the great inconvenience caused by this situation. I shall come to the House tomorrow and consider whether I can make a further statement then and, if not then, on Monday. I want to overcome this matter. However, I repeat that, in order to overcome it, it is not only necessary to discuss what may be thought to be the issue but to have an orderly system of discussion to resolve the matter.

Mr. Torney: Is the Lord President aware that before coming here many Labour Members worked as full-time officers of trade unions? I am sure that those hon. Members would be willing to offer the Government the benefit of their experience in negotiating on this dispute if the Lord President would like to avail himself of it.

Mr. Foot: I shall be happy to accept the offer made by my hon. Friend in that or any other area—in the Lobbies or anywhere else—and to discuss the matter with him. I accept his offer in the spirit in which it was given.

BILL PRESENTED

HOUSEBOATS (RENT ALLOWANCES AND RATE REBATES)

Mr. Michael Shersby, supported by Mr. Tony Durant, presented a Bill to impose on local authorities the duty to establish and to bring into operation schemes for rent allowances and rate rebates for houseboat dwellers: And the same was read the First time; and ordered to be read a Second time upon Friday 14th July and to be printed. [Bill 159.]

REGIONAL AFFAIRS

Ordered,
That the Matter of the 1976 Review of the Strategic Plan for the South East be referred to the Standing Committee on Regional Affairs.—[Mr. Foot.]

Orders of the Day — SUPPLY

[26TH ALLOTTED DAY]—considered

PHARMACISTS

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

4.3 p.m.

Dr. Gerard Vaughan: I am sure that the House will have heard with sympathy that the Secretary of State has had to go back into hospital and will want to wish him a speedy recovery as he will not be with us today.
We have noted your comments, Mr. Speaker, about the shortness of the debate. I, for one, will endeavour to be fairly brief in opening the debate.
Yesterday my hon. Friend the Member for Beeston (Mr. Lester) presented a petition with 1 million signatures—2 per cent. of the population—which were collected in just under four weeks. That is a measure of the feeling in this country against the Government's astonishing mishandling of the pharmacists. That is why we have brought this situation before the House today for urgent debate.
For two years negotiations have been going on between the chemists and the Government over their payment for National Health Service work. These negotiations have now completely and utterly broken down. The pharmacists are asking for an independent arbitration, and the Government have refused it. That is the tragedy of the present situation. Pharmacists in Scotland can go to arbitration, but arbitration is apparently denied to pharmacists in England. Meanwhile, the small pharmacies round the corner are in such perilous financial circumstances that many of them are closing down.
More than that, the whole pattern of drug dispensing is being changed. Insidiously and quietly a major alteration is going on in our health care. I say that because pharmacists are, on average, dispensing between 5 million and 6 million prescriptions a day. Indeed, they do


more than that. As well as giving drugs, they are part of what has been called the "Johnny has a sore throat; what can I give him?" service. Pharmacists provide an essential part of our health care in terms of advice, comfort and support for thousands of people. That aspect, which is beginning to be eroded by the Government's policy, constitutes a very serious change.
At present, 2 per cent. of pharmacies are closing down each year. Last year one pharmacy closed down almost every working day. The rate was lower in the first three months of this year, but it is now beginning to rise again.
Those figures would be even higher but for the fact that one in three pharmacists in general practice is over 60 years of age. This is a serious situation. The pharmacist finds himself trapped. He is locked into a business, to which he has probably given a life-long service, and cannot now get out because he cannot sell it. The goodwill in the small pharmacy has virtually gone. Profits are so low that no one wants to buy the stock. Therefore, the pharmacist has no choice but to try to continue, hoping that by some miracle the situation will improve. That is the disastrous situation which the Government have brought about in the last four and a half years.
The local pharmacist is now in an impossible financial position with respect to National Health Service work. Last year inflation for drugs was running at 24·6 per cent. This year it is running at 21 per cent.—that is, 21 per cent. on top of the 24·6 per cent. We do not hear very much about those figures from Labour Members.
Last year, for the small chemist to keep a stock of drugs available on his shelves—for most chemists that represents £6,000 worth of stock—he had to set aside an extra £1,500. This year he will have to set aside an extra £1,200. That is only to stand still, not to improve his service. That is to keep the same number of drugs on his shelves available to the public. Even worse, that has to come out of an average overall gross profit of only £1,600. Therefore, we can begin to see what an impossible situation the pharmacists is in.
Not surprisingly, many chemists have now reduced their stocks, so that what

was, on average, 11 weeks' supply of stock has now been cut to seven weeks' supply. But this does not solve their problems, because under the present arrangement with the Government, if they reduce the amount of stock they hold, the Government reduce their payments for NHS prescribing. So the unfortunate chemist is in a vicious circle. If he does not replace his stock, if he cuts it down, he gets less money and he then has less with which to replace his stock.
Therefore, we have a situation today in which the stocks on the chemist's shelves are diminishing rapidly. But, more than this, the range of drugs which the chemist holds on his shelves is also diminishing rapidly. So there is not only less stock but there is less variety. This has the effect, as was found in a recent survey, that one in eight of prescriptions had to be supplied on at least two visits. The person had to go to the chemist, ask for what he wanted and then go back later in the day.
This, as the House will realise, is a terrible problem for young people with children in prams, for the elderly and for people in rural areas where the bus services and transport may be very inadequate. It is particularly the rural chemists who are finding that their business is running away from them. Help the Aged says, for example, that in one part of Kent there is now no pharmacist within an area of 500 square miles. If that is true, that is a very serious position, indeed.
The number of trained pharmacists is being reduced, so that many chemists' establishments now have one trained pharmacist and a number of other staff working on lower salaries who are not fully trained pharmacists at all. That is a direct deterioration in service which is going on. Whereas in the past the majority of newly trained pharmacists wanted to go into retail pharmacy, we now have a situation in which 60 per cent. want to go into industry or into the hospital service. That is another falling off in the standards of pharmaceutical care. The whole pattern of provision for the public and the community is being altered, and the Government sit back without, apparently, any policy, allowing this to happen, totally inert and inactive over this situation.
It is a sad characteristic of the present DHSS Ministers that whenever they make a positive statement on a great range of subjects—on abortion, on unemployment amongst nurses, on the waiting lists, or on industrial unrest in the NHS—within a few weeks they have to come to this House and admit that the situation is not as good as they thought it was, and that, in fact, there is cause for alarm. Last November we had exactly this situation. In a debate on the Consolidated Fund, we were told that there was no cause for alarm. But within a few weeks, we had the Minister saying that he was very worried indeed about it.
In conclusion, the pharmists, quite rightly in our view, feel that they are being unjustly victimised. They have asked to go to arbitration. They have undertaken to abide by any decision made as a result of arbitration. The Government have refused this. As I said earlier, if one is a chemist in Scotland, one has a right to arbitration, but not if one is a chemist in England.
The review body formula which is applied to all other Government contracts does not apply, apparently, to the chemists. Why not? The chemists ask how their remuneration is actually fixed. What are the criteria? What are the relationships between their income figures and those of other professional bodies? They do not know. To them it appears that the Government take a totally arbitrary view on this matter. After two years of negotiation with a monopoly employer, they now have a situation which has broken down.
The Government say that there is no case to answer and that the chemists are reasonably paid. That is the Government's answer. The Government say that if the chemists went to arbitration, there is no doubt at all that the arbitration would come down in favour of the Government. Then why do the Government not allow the chemists to go to arbitration? What is stopping us? Why does not the Minister tell us? I ask him to tell us today what is the Government's case in refusing arbitration. What has the Minister to fear that he does not intend to tell us about today? If his case is as good as he says it is, he has no reason whatsoever to refuse these people a just appeal to an arbitrating body.
I suggest that the Minister's case is not as good as he says it is and that the pharmacist is a professional and he is a small business man—and small business men professionals can get no understanding and no support whatsoever from the present Government.

Mr. Doug Hoyle: Rubbish. Absolute nonsense.

4.15 p.m.

Mr. Sydney Tierney: I think that there is some evidence from a number of sources that pharmacists have problems, particularly in meeting their commitments under the National Health Service. I am sure that most Members of Parliament will have received complaints from constituents about the availability of dispensing outlets. There is no doubt that they are declining in number. Nearly all hon. Members will have received letters from pharmacists with premises in their constituency, because they have conducted a national campaign.
I want to comment on three aspects of the problem—the effect of the pharmacists' problems upon the public, the reasons for the decline in the number of pharmacies, and the fear that the whole retail pharmacy structure is in danger of collapsing. I should also like to say something about the problems and the concern of the trade union which is involved in this industry.
In my area I have received representations from individuals and various residents' associations about the availability of dispensing outlets. Particular complaint has been made on behalf of old people and young mothers, as the hon. Member for Reading, South (Dr. Vaughan) said, and obviously there are large areas, particularly housing estates, near city centres which lack dispensing facilities, and many people have to travel into cities to get prescriptions dispensed, which costs a lot in both time and money.
Certainly the fall in the number of dispensing outlets puts a strain on the rota system, particularly at holiday time. I imagine that we have all experienced difficulties and complaints from constituents who have had to go over bank holiday weekends to the dispensary of the local hospital, or make contact with the police with a view to getting some


service which they require, sometimes in an emergency. It is obvious that there is some strain on the service and that gaps are appearing in the structure.
Local pharmacists who have written to me have talked about 250 closures a year. The hon. Member for Reading, South spoke of a drop of 2 per cent. per annum. The point I want to make is that everybody seems to agree that closures are taking place at a pretty fast rate. I think that all of us must be concerned about this and determined to do something about it if we are to sustain an adequate spread of dispensaries within our neighbourhoods.
We must have a viable and efficient structure working in conjunction with the Health Service, with accessibility to all members of the community, whether it be in cities, towns or villages. If the trend of closures continues, then the whole structure of dispensing outlets will collapse. The economic and social costs would be beyond calculation. I think that we can envisage what would happen if that should occur.
I think that all hon. Members know that the pharmaceutical services negotiating committee represents chemist contractors. It has been, and will continue to be, involved with the Department about the remuneration of the people it represents. This is right and proper. It could be called a trade union, and I would not attempt to interfere in any of its negotiations. In any case, the structural mechanism of the agreement it has with the Department is not easy to follow and would make it difficult if one wanted to interfere.
The pharmaceutical services negotiating committee is right to seek to improve and maintain the level of remuneration of its associates. I do not think that anyone would dispute that. But I am hound to say that the decline in the number of pharmacies cannot he imputed solely, or generally, to the overall level of remuneration contracting chemists receive from the Department.
That is not the only cause. There are few pharmacies within the Health Service except in the health centres and in hospitals. There are few outlets that do nothing else but dispense. Instead we have chemists' shops where doctors' prescriptions are dispensed and a multiplicity

of other goods are sold—toiletries, cosmetics, cameras, medications and healing remedies of more than 57 varieties. Such shops provide a wide service.
Pharmacists are pharmacists first and shopkeepers second, particularly when they own their own shops. But often it is the other way round. They are shopkeepers first and pharmacists second. This is a problem, and it must be examined. Whether they are shopkeepers first depends upon how many prescriptions they dispense.

Mr. Kenneth Lewis: There is much in what the hon. Member says. But does he think that the reason why pharmacists become pharmacists second and shopkeepers first is that they have no option? They have to expand the non-pharmacy side because pharmacy alone does not give them a good return.

Mr. Tierney: Pharmacists often have to rely on the success of their general trading to remain in business. This is the danger in the system. Pharmacists should not have to rely on general trading profitability. They should be able to make a living by providing a public service.
A decline in the retail trade of chemist shops, because of competition or changes in shopping habits—I have in mind supermarkets and hypermarkets which sell similar items to those sold in chemists' shops—has caused the closure of many small retail pharmacies. In many instances much of the profit on the shop side has been lost and the number of prescriptions dispensed has not earned sufficient remuneration to keep the business viable.
Population movements through slum clearance have caused problems. One of the biggest problems is the inability to find outlets to replace pharmacies which have closed. I am thinking of housing estates where shop premises are available and there is a need for a pharmacy. Overheads on new premises are astronomical and often supermarket competitors are already installed in the area selling similar lines to those sold in pharmacies at more competitive prices. Pharmacists are reluctant to operate on the basis of earnings from prescriptions alone, because that


is too risky. To some extent that is understandable.
It is clear that many doctors in the Health Service are opposed to community health care and health centres. Many pharmacists are opposed to State pharmacies. If that were not so, there would not be so many owner-occupied pharmacies. Many pharmacists want to continue to own their pharmacy-cum-shop and to operate it on a profit-and-loss basis.
Many of us would like to see the National Health Service extended to encompass more dispensing services than it has at present. But we have an infrastructure of mixed types of dispensing outlets. We must retain that structure, with fair remuneration for those who operate it so that the public is protected, until we find a better structure.
Last year I asked the Minister about his responsibility for maintaining a service for dispensing prescriptions within the Health Service. The Minister said that he had power to make or authorise whatever arrangements were necessary to enable an adequate service to be provided. The Minister has powers in this respect.
There should be some agreement with the contracting chemists and their representatives in order to create a structure of dispensing outlets which enables pharmacists to survive on the basis of remuneration earned from prescriptions and the other services that they provide for the Health Service. A dispensing service which relies for its existence on the success of its general trading operations, with cut-price attacks from supermarkets, is vulnerable and will remain so for as long as this pattern of trading continues.
The main difficulties are experienced by small businesses which dispense a small number of prescriptions. Perhaps this situation should be examined because of the public service role played by the operators.
The large multiple chemists also have problems. Some of them have pharmacies within supermarkets and department stores. Such companies do well both in general trading and by dispensing prescriptions. But the retail trading hours of pharmacists and the anti-social hours involved in weekend work, particularly when a rota is operated, together with relatively low pay, mitigate against the

recruitment of both qualified and unqualified dispensers in the large businesses.

Mr. Michael Shersby: What evidence is there to show that the recruitment of pharmacists is affected by anti-social hours? I have always been under the impression that pharmacists, like doctors and dentists, are dedicated people who are prepared to accept that an element of weekend working is necessary.

Mr. Tierney: From my experience there are problems in the large dispensing outlets such as the Co-op and Boots. Because of the rates of pay and the anti-social hours they find it difficult to recruit qualified staff. I have represented such staff and have dealt with the problems.
The difficulty of recruiting qualified staff sometimes leads to the closure of an outlet. The public are affected by that. In the large multiple companies remuneration is an important factor for the staff. USDAW—the Union of Shop, Distributive and Allied Workers—in which I declare an interest, is the largest trade union within the drug and fine chemical industry. It is the only union with members in the pharmaceutical retail and distributive network. Naturally, USDAW has followed with interest the negotiations with the Department and the pharmaceutical services negotiating committee. It has followed the negotiations because it is the trade union on the national joint industrial council for retail pharmacy responsible for maintaining the wages and conditions for pharmacy employees—qualified and unqualified dispensers and shop assistants who work in chemists shops.
The jobs of USDAW members in wholesale and retail pharmacy are dependent on preserving the viability of the existing infrastructure for supplying prescription medicines and over-the-counter pharmaceuticals to the public. The pay of qualified pharmacy managers and unqualified assistants is low compared with the pay of their trade union colleagues employed in the wholesale or manufacturing side of the industry.
USDAW wishes to protect the jobs of its members when pharmacies close down. The union is anxious about the low pay in the industry. If the Department places restrictions on profitability in the retail


pharmacy sector and wages remain relatively low, the retail sector will lose its skilled professional staff and some pharmacies will be in danger of closing because of the shortage of trained personnel. There are signs that that is happening.
Mistakenly, the retail side of the industry is not usually considered to be important—and I stress the word "mistakenly". The retail industry will become more and more important. There would be nothing but chaos in the manufacturing and wholesaling sides of the drug and pharmaceutical industry if the retail end of the infrastructure broke down, to say nothing of the great hardships that the public would suffer and the outcry that would ensue.
The problems of pharmacists, like many other problems that we discuss in this House, have no single simple solution. While the argument about remuneration is strong, this is not a single simple answer to the problem. There certainly is a case for pharmacists, whether owner-occupiers, small businesses or big business groups, to receive a fair remuneration for the services they carry out for the Health Service. No one would deny them that. As has been said, their contribution is vital. They may have a case for some improvement in the situation, but that is a matter for those who represent them and negotiate on their behalf, and they should be given every facility to test the validity of their claim.
I also believe that there is a strong case for large and small proprietors to survive in business mainly on their professional skills and less by their shopkeeping abilities. Many pharmacists have closed because their general trading situation has deteriorated. A degree of planning is required to balance the situation. The pharmaceutical services negotiating committee appears to agree with that. I am pleased to note that it has recently agreed a draft submission to the Government which would radically change the freedom of retail pharmacists to conduct their businesses how and when they please. They are aware that a more rational location of pharmacists is in the public interest.
In considering the problems of pharmacists and the number of closures, one cannot ignore the trade union point of

view. The problem of low pay for qualified and unqualified staff on the retail side is significant, as is that of anti-social hours. The continuation of the retail infrastructure depends on the ability of employers to recruit and retain appropriate staff when, as the hon. Member for Reading, South pointed out, other industries are competing for many of these people who are taking advantage of those opportunities or going into hospital services. This problem increases as the national companies grow and the small pharmacies disappear.
I hope that my right hon. Friend the Minister of State will consider all these points and recognise that the retail end of the National Health Service is as important as any other sector.

4.34 p.m.

Mr. William van Straubenzee: I am sure that the whole House has listened with care and attention to the interesting speech by the hon. Member for Birmingham, Yardley (Mr. Tierney), with the greater part of which I certainly agree. Particularly I hope that the Minister of State, who is to reply to the debate, will take careful note that his hon. Friend supports the principal request made from the Opposition Front Bench by my hon. Friend the Member for Reading, South (Dr. Vaughan), which was, ay I think he put it, that the pharmacists should certainly have an opportunity of testing their case, by which I take it he means that he is in favour of the central request for arbitration.
I congratulate my hon. Friend the Member for Reading, South, who opened the debate. He spoke in this matter, as: in so much else, with very great authority, and not the least of the merits of his-speech was that it was extremely brief. I intend to follow his example.
I am not at all sure that the Government have taken on board the very serious situation that is developing in so many areas with the closure of small chemists' shops. It is becoming very difficult for many of our constituents to get their prescriptions made up, and not only is it in this aspect of the National Health Service that problems are encountered. I make merely a glancing reference to a matter with which all hon. Members will be familiar, and that is the difficulty of constituents in some parts of


the country in getting dentures made on the National Health Service.
I do not think that any other single problem is raised with me so often when I am walking about my constituency as the request "Cannot you get a chemist to come here?", "Cannot you get him into the neighbourhood shopping centre?" or "Cannot you get him to the large village?" I represent an area where this problem—and we all have different problems to face—is growing and has grown massively. It is also an area where for many people public transport is nothing like as good as it should be. It is all very well if one can drive quickly in one's car to pick up one's prescription, but for those who are dependent upon the bus, which is perhaps most inconvenient and not always certain to run, if they are elderly or suffer a deformity of some kind, the location of the local chemist is of immense importance. A person who is dependent on a drug to treat arthritis or the innumerable other conditions that affect young and old knows exactly what I mean.
I must add my voice to the authoritative voice of my hon. Friend the Member for Reading, South in saying that the situation is of great concern to us all. Recently the Minister of State was kind enough to write to me at some length giving the figures for closures of chemists' shops over the years. There were 228 closures in 1975, 215 in 1976 and 138 in 1977. I note, of course, a decreasing graph of closures, but the figure is alarming nevertheless. My hon. Friend produced on another occasion for the 12 months ending November 1977 the figure of 266 pharmacy closures as against 135 pharmacies being opened.

Dr. Vaughan: Even though matters have improved slightly this year in that in the first three months the number of closures was 21, my hon. Friend may be interested to know that there were no fewer than 22 closures in April alone.

Mr. van Straubenzee: I steered clear of the figures for this year because my hon. Friend dealt effectively with that aspect when he spoke. I have merely quoted the other figures to show how serious the position is.
The essential dispute is over the size of the increase in the net profit margin

on National Health Service dispensing. The Minister has rejected arbitration basically—I hope that I condense accurately a complicated argument—on two grounds. First, he says that it seems essential for the area of disagreement to be precisely defined before arbitration is considered. I must concede that it is desirable, if possible, and that we should have absolute precision. However, there are many cases in the experience of hon. Members where such a situation did not apply but where it was nevertheless right to go forward to arbitration.
The Minister's second reason is that we should wait a while to see how the differential on-cost system of payment work out. He will agree that that system, comparatively newly instituted, clearly has no relevance to the closure figures I gave because it comes at a later stage. I see the Minister nodding in agreement. If that is so, I canot really see why we need wait any longer before moving to arbitration.
Many times in this House I have heard, as have hon. Members of all parties, Goverments, and particularly a Labour Government, urging parties to a dispute to arbitrate. For example, I should not be the least surprised if on the very dispute of which we heard a few minutes ago, affecting the catering services of the House, we did not hear recommendations to the parties to go to arbitration. It will not surprise me in the least if we hear that, and yet here, where in a sense the Government are the employer, they are resolutely setting their face against it. Rightly, doctors and dentists have a review body procedure, but the unfortunate chemist finds himself in a limbo position.

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): The hon. Gentleman is making a very responsible speech, but I feel that I ought to correct him on one point. The Government are not the employers of these pharmacists. They are independent contractors.

Mr. van Straubenzee: I am aware of that, and I hope and believe that I used a phrase such as "in a sense" in referring to the employer position, but, of course, I accept the correction of the Minister of State. I quite understand that the chemists are legally in an independent


contracting position. But, in relation to my argument about arbitration, I do not think I am straining the argument in placing the Government in an employer position so long as I keep the phrase in inverted commas, so that the Government have the initiative. It is because I believe that the situation is more serious than the Government realise that I gladly but briefly add my words of support on this subject.

4.43 p.m.

Mr. A. J. Beith: The pharmacist, or the chemist, as we all know him so much better, has a key role in the National Health Service, a fact which is obvious from the very long and high standard of training which we consider is necessary to give him. The chemist's feeling at the moment is that the place which is so well recognised by the amount of training he is given is not well enough recognised in the remuneration he gets.
The importance of that role can be seen in the two key things which he does. The first is to stock and supply the medicines prescribed by general practitioners to the general public, a very responsible role when one thinks just how dangerous are some of the commodities he is prescribing, how much care has to be exercised, how much security has to surround their storage and how much depends on whether the right amount is handed over to the patient.
The chemist, however, is more than that. He is an indispensable source of advice and guidance to the public on minor ailments. He is part of the front line troops of the National Health Service, the first person whom many members of the public, myself included, contact on minor ailments when we say quite happily, "I do not want to bother the doctor with a little thing like this. I will go to the chemist and see if he can do anything about it." We are quite ready to bother the chemist when we do not want to bother the doctor.
But the chemist is not paid for that side of his service. He benefits from the advice he gives to those of us who seek it on these occasions only if the end result is that he sells us something off his shelves. It is not always realised just how much use people make of chemists as a first port of call and how the general practitioner

would be even more overwhelmed than he is on small matters if this were not the case. When we look at it closely it it very easy to see how much longer the queues in the waiting rooms would be if the things with which chemists now deal with in the first instance were being dealt with every time by the general practitioners.
We must look at this professional service aspect because, as some hon. Members have pointed out during this debate, we should encourage the pharmacist to make the best use of the expensive health training that he has been given. He may be a shrewd businessman or he may not, but surely we should have a system which makes use of the investment which society has put into him in the form of training. Whether he can supplement his income successfully by the success of his business is not the test of his ability as a pharmacist. The emphasis ought not to be on how successful a business man he can be in selling other products.
As the pharmacists' representative body itself has recognised, the time has come to look at that service side of the pharmacist's role and to see whether the system should give more encouragement and recognition to it. In any case we had better remember it now, when we are considering the current issues of the remuneration of chemists. If the retail pharmacies collapse, that service will not be available and the impact on the rest of the Health Service, on general practitioners and on the casualty departments of hospitals and other places in the front line will be keenly felt.
We can see now in the areas where pharmacists are not available the problems which arise. In many rural areas the facilities of a pharmacist are something one has to go a long way to find, and in some places that service is replaced by the doctor himself carrying a dispensary service. In many other areas, though, it is necessary for people to travel long distances to a chemist's shop, often at considerable expense. As in so many other ways, the patient in a rural area is paying a very high price at the receipt of service for the Health Service.
That is something which many people in urban areas do not always recognise. The patient in a rural area has to pay not only the prescription charge. He may have to pay £1 in bus fares to get to


a chemist and back again, just as he may have to pay to travel for hospital treatment. In so many ways the rural consumer is at a disadvantage. I can think of quite big communities in my constituency, such as the large mining village of Shilbottle, where people have to pay a very high bus fare to reach the chemist's shop in the nearest town to get a prescription dispensed.
In some areas energetic attempts have been made to deal with this problem by providing voluntary collecting services to get prescriptions for the elderly and housebound people. The Department must look carefully at what help and encouragement can be given to these services.
My hon. Friend the Member for Colne Valley (Mr. Wainwright) had a motion on the Order Paper dealing with this matter which attracted support from many parts of the House. It arose from the problem that help was no longer being given by the area health authority for the petrol costs of a voluntary collecting service which was doing a splendid job in bringing prescriptions to people who could not get out from their homes to travel to a nearby town to get them. He drew attention to a circular published by the Department concerned in Scotland, which offers far better possibilities for this kind of initiative and enterprise, which depend in large measure on voluntary effort. I hope that the Department will look again to see what can be done to help schemes.

Dr. Vaughan: Perhaps the hon. Gentleman would care to comment on the fact that about 20 per cent. of prescriptions now require at least two visits before they can be collected.

Mr. Beith: I noted the hon. Member's comment on that and I was reminded of my own experience quite recently when I went to the doctor on a minor ailment and got a prescription for two items. It happened that I was travelling right across my constituency and I was in the fortunate position of being able to call on a number of chemists to try to get those items. I went to five chemists' shops, none of whom could provide both items on the prescription and all of whom had the kind of stock problems to which I shall refer in a moment. On the

face of that difficulty, anybody who was not in the unusual position of having a car at his disposal and who did not have other reasons for travelling a considerable distance across Northumberland would have been at his wits' end trying to get the medicines which had been prescribed for him.
The situation has become much worse, and in Northumberland we have lost seven out of 63 chemists' shops in two years. At that rate we shall have halved the number of chemists' shops there within 10 years. Special measures to help the very small pharmacist in very rural areas have been of some assistance, and I can point to one or two of the very small chemists living in scattered areas who have benefited from the sliding scale and the rural area subsidies introduced by the Government and who might not now be operating but for that.
Helpful though that has been, we have to remember that it has been at the expense of other pharmacists. As a correspondent, a chemist, pointed out in a letter to my hon. Friend the Member for the Isle of Wight (Mr. Ross),
It cannot be denied that Mr. Ennals is providing the small pharmacists business with more money, but his Robin Hood approach is not exactly appreciated by the owners of the busier pharmacies whose remuneration is being reduced to help to pay these pharmacists more money.
That brings us back to the fact that there is an overall problem of the amount of money going into retail pharmacies which this particular scheme has not solved, even though it has helped one or two of the smaller pharmacies in the more scattered areas.
Pharmacists look for a recognition of these difficulties in the handling of their remuneration problem, which has now gone on for such a long time. They point out that to have one's claim to additional income measured by the rate of closures—the rate of people going out of business—is a harsher test than anybody else has to face. At least, it provides solid proof that something is wrong with the remuneration. We must bear in mind some of the difficulties with which the chemist has had to contend in recent years.
Drugs and medicines are now big business, and more and more are coming on to the market. Sometimes they represent major advances and important


alternative treatments; sometimes they are merely brand name differentiation—one company producing something slightly different from another. But the chemist has to stock them. Unlike other traders, he cannot simply drop old lines. At least one doctor in his area may go on prescribing anything that he previously stocked. It is not likely that doctors will all at once switch prescribing from long-tried medicines to new alternatives.
The worst possibility is that if a doctor suddenly stops prescribing something that a chemist has been encouraged by demand to stock, he will be left with a large stock of which he cannot dispose. He cannot put it out on his counter, marked "Sale—unwanted drugs at reduced prices." The doctor who runs his own dispensary is in an easier position. He and his colleagues in a group practice can decide to change one medicine for anther. He can relate prescribing to stock far more easily than the pharmacist, particularly as the latter is usually dealing with several doctors in different practices.
The result of all this is that the chemist faces an ever-expanding stock list. He has to borrow to get his stocks and he is paid not on sale but later. By the time he is paid, high rates of inflation—which are higher in drug prices than in almost any other field—make it a nightmare to recoup the interest on what he has had to borrow. His profit deteriorates all the time. He cannot mark up the price of his remaining stock to compensate. To him, the prices are fixed.
The move to group practices, while it has helped some pharmacies, has caused great difficulties for those which are some distance away from health centre. Previously, there may have been a nearby doctor whose patients went to these chemists for their prescriptions. Now, when a practice is centred elsewhere, the chemist loses the bulk trade in the morning or evening as large numbers of people leave the surgery. He is increasingly squeezed out. The High Street chemist, who in many places is at the most convenient point for the largest number of consumers, is often the one who is left out.
In some rural areas there are staffing problems, particularly when it comes to covering holidays. A chemist who wants a holiday is not like other shopkeepers.

He cannot call on a helpful friend or an unqualified member of staff. He must have someone capable of doing a highly professional job. It has been suggested that some sort of relief service for pharmacists could be provided in rural areas. I hope that the Department will consider this.
But all these difficulties are part of the background to the dispute on remuneration, which centres on the net profit margin. The chemists say that their present 16 per cent. return on capital is only a 2·9 per cent. return on turnover, which is not enough. The equivalent of a 5 to 6 per cent. return on turnover, which is what they are asking for, would be well within the pay code.
Governments have often been hesitant about going to arbitration because they fear that a settlement will fly in the face of pay policy, cash limits or whatever restraints they are applying. That does not seem to be the case with the pharmacists' claim. The area of dispute does not suggest that the Government could be presented with such an arbitration report. It is much narrower and could go to abitration without raising those fears. In any case, Governments have gone to arbitration in circumstances when they have faced that result.
My hon. Friend the Member for the Isle of Wight asked in April whether the Minister would now permit independent abitration. Among other things, the Secretary of State said that he had not
yet been told the grounds on which"—
the pharmacists—
find my arguments unacceptable."—[Official Report, 3rd April 1978; Vol. 947, c. 26.]
The Minister must surely know those grounds by now. He may not agree with them, but the pharmacists have made their position clear and have put a strong case. The Minister may feel that he can answer it, but we have nothing to lose by taking the matter to independent arbitration.
This is a situation in which, above all, the application of an independent mind would help to re-establish confidence in every quarter. The pharmacists could see their claim being examined by someone who, they felt, had no vested interest and who would be likely to award them, even if he went beyond the Minister's offer, a


result in line with the pay and prices code. Surely that is reasonable.
I think that we all find it difficult to understand why the Minister should so far have been reluctant, but some time has elapsed and an opportunity has been given to see what effects the new system has had on the profits of pharmacists and on their attitudes. Whatever reservations Ministers may earlier have had, they could now readily submit this matter to responsible and sensible arbitration.

4.57 p.m.

Mr. Eric Ogden: I ask the hon. Member for Berwick-upon-Tweed (Mr. Beith) to forgive me if I do not follow him into the details of his argument. However, I confirm his description of pharmacists as the front line of the National Health Service, not only because of their special knowledge and skill but because people do not want to bother the doctors. My immediate thought was that, judging from my constituency postbag there are areas where one needs to be fit, well and aggressive in order to bother doctors so effectively as to be able to see them. No doubt that is unfair to most doctors, and we could have a similar debate on the problems of the medical profession.
We should all be grateful to the Opposition for using at least part of a Supply Day for this debate. The hon. Member for Reading, South (Dr. Vaughan) referred to only one of the problems of pharmacists. Perhaps the right hon. Member for Wanstead and Woodford (Mr. Jenkin) will refer to others when he replies. They have made a useful contribution to the general debate—even if I and perhaps some of my hon. Friends are not wholly convinced that they are doing this entirely without regard for possible party political advantage.
I must first declare my interest. I am a parliamentary adviser to the Council of the Pharmaceutical Society of Great Britain, an interest which I share with a Conservative Member.
The society is the registration and professional body for pharmacy in all respects of pharmaceutical practice except that of remuneration. It operates under Royal Charter and several Acts of Parliament. Its 31,000 members—in

retail pharmacies, hospital services, industrial organisations, research and academic institutions—control its continuing activities in what I regard as an admirable and democratic manner. Some of our trade unions—I speak as a member of the national executive of a major union—could learn much from the detailed organisation of the Pharmaceutical Society and the way in which it controls its activities.
My opposite number will confirm that the term "parliamentary adviser" means exactly what it says—not a public relations consultant, or a public affairs manager, and certainly not a publicity officer. Our duty is to advise the society on parliamentary affairs. Naturally, we learn much of pharmaceutical matters.
The hon. Member for Reading, South, after a series of Committee meetings on the Conservative Bill reorganising the hospital services, said, referring to me, how useful it was to have a pharmacist serving on the Committee. He was perhaps a little surprised when I pointed out to him that I was not a pharmacist but a coal miner. Coal certainly has pharmaceutical derivatives, but I take it that the hon. Gentleman meant to be complimentary—more complimentary than the remark of one now retired Member of the Department of Health and Social Security who referred to the society's parliamentary advisers as the ultimate deterrent.
It is strange that in the House, although we have members of almost every profession in the country, pharmacy is the one that is not represented. There has not been a pharmacist Member in the House since Sir Hugh Linstead, who was secretary and registrar of the society and a Conservative MP. Among hon. Members opposite is a member of the Society of Apothecaries, but that is not quite the same thing. I hope that at some time in the not too distant future the society will be able to produce one of its own to speak in this House—and naturally I hope that this will be from the Labour Benches.
All that I have learned about pharmacy and pharmacists convinces me of their almost infinite variety. There are those I call the pure professionals, who look with perhaps an understandable degree of envy, or at least admiration,


to their colleagues in dentistry or ophthalmy who have relative freedom from the demands of commerce and trade, and look back, and indeed forward, to a golden age of pharmacy, free from such restrictions of commerce, when they are able to practise their profession without trade. They look, too, at practice in Europe and other places where pharmacy is practised with much less involvement in trade than here.
Other pharmacists, through the hospital pharmacy and the area and regional health authorities, are able to combine the special skills of pharmacy with skills of administration in a career service. Others hold the highest positions in industry, research and commerce, and recently even the Football Association has called on the knowledge and practical common sense of a professor of pharmacy to help try to resolve some of the problems of drug abuse in professional football.

Mr. Hoyle: I do not want to interrupt my hon. Friend's interesting speech, but I hope that this move by the Football Association embraces industrial relations practices, of which I have been complaining.

Mr. Ogden: My hon. Friend never misses an opportunity of making the appropriate point. We can both send copies of Hansard to the Football Association tomorrow.
The pharmacists about whom we are really talking in this debate are the small independents or the very small groups of pharmacies in the town or village, the people in the local community who are in the front line of which the hon. Member for Berwick-upon-Tweed spoke. These are the pharmacists about whom we and our constituents think. They are the people, in our minds, of medicines and medicine.
The one aspect of pharmacy which is not a direct responsibility of the society is the remuneration of pharmacists. Of course the society has a direct interest and concern in the welfare and well-being of all its 31,000 members, whether they be in any of the aspects I have described or among the 10,800 pharmacists whose remuneration is negotiated by the pharmaceutical services negotiating committee. The Pharmaceutical Society is on

record clearly and unequivocally as wholly supporting the claim of the PSNC for arbitration on the current remuneration dispute with the DHSS.
The Pharmaceutical Society is convinced that in a situation, as it says,
where retail pharmacists (chemist contractors) are dealing with one authority, and an impasse is reached, natural justice can only he properly served by an independent assessment of the views of both sides.
That is the society's position. It is stated clearly. It is one of the points of view that have been taken into account by Ministers and the Department, and even if it has not yet persuaded Ministers to move towards arbitration I am certain that it is a continuing concern of Ministers and an effective way of helping towards that arbitration.
I believe that that statement is a much more helpful and much more calm way towards arbitration than a leading article which appeared in the Pharmaceutical Journal on 11th March. That article was headed "Intransigence rules". It read:
The decision by the Secretary of State for Social Services to deny pharmacists in England and Wales the right to go to arbitration over their long-standing dispute with the Department of Health over the net profit margin on National Health Service dispensing suggests a degree of intransigence on the part of the Government that borders on the tyrannical.
That was the statement. It seems to me such a complete overstatement as to be completely counter-productive. We know that my right hon. Friend the Secretary of State is a determined man who has to be persuaded, that he can be unconvinced or convinced. But no one in his right mind could possibly call him tyrannical. That article seems to have been written by the same school of journalists as those now writing speeches for the hon. Member for Abingdon (Mr. Neave) and equally counter-productive. My advice was that that sort of thing would not persuade anyone anywhere. It certainly confirms that the editor of the Pharmaceutical Journal has more Press freedom in Lambeth High Street than some of his colleagues in Fleet Street. But he does not help towards a solution.

Mr. A. P. Costain: Has the Pharmaceutical Society had any sensible argument from the Secretary of State about why there should not be arbitration?

Mr. Ogden: Most of the difficulties between the profession and the Department have been argued out and decided by agreement between the Department and the Society on the PSNC—the profession. This remuneration dispute is one of the very rare occasions when there has not been agreement either readily available or reluctantly available. We are talking of an exceptional situation and not a regular and continuing situation. This is the one-off affair where agreement has not been possible. On hundreds of occasions up to now agreement has been possible.
Part of our problem and part of our duty today is to see whether we can find a way of resolving the difficulties, and we have to recognise that the PSNC is not simply an organisation for the small pharmacist. It is a complex organisation and the needs of its members vary tremendously. It speaks for 10,800 or more pharmacists—not all are small independents or even the pharmacies with branches. PSNC includes the 1,200 pharmacies controlled by Boots. I suggest that the needs of Boots, a first-class company in manufacturing, pharmacy and retailing, which can pay £60,000 to Glenda Jackson for three television commercials—good luck to her and good luck to the company—are not exactly the same as the needs of the small pharmacists to whom I go for my prescriptions. There is a difference, and that difference goes all through the PSNC—to the Boots company, to the co-operatives, to the 300 multiples, to the thirties, the threes and the tens. There is considerable variety within the PSNC.
To me, that variety seems to make it necessary to have both a common contract of service for pharmacists as such, not the lowest common denominator but the highest common multiple all the way along the line, plus the provision of—I will not say supplementary benefits in this debate—special allowances, special considerations and special remunerations, so that we can achieve the end we want, which is the provision of proper pharmaceutical services where they are needed for the people who need them.
Remuneration is not an end in itself. Pharmaceutical services are not an end in themselves. Their purpose is to provide service to the people in need. Some special services have to be available. The

essential small pharmacy scheme is only one way in which it can be done.
The PSNC has a first-class record in negotiating on behalf of its members. Agreement has been reached on almost every occasion. This is the one occasion on which agreement has not been reached. Part of our task should be to help towards reaching agreement.
Arbitration was almost the whole theme of the speech by the hon. Member for Reading, South. There was a time when the right to arbitration was written into the contract of the chemist contractors. It was taken out, if not at their direct request, certainly with their full knowledge, agreement and consent. That is on the record as a matter of history.
When the Pharmaceutical Society tells me that it believes that natural justice says that this should be allowed to go to arbitration I am reminded of my father's words to me—"Eric, never claim natural justice or even justice, but do claim your rights." We have to recognise in this debate that arbitration is not a right in law for pharmacists. We can argue that it ought to be. We can argue that it should be. But at the moment it is no use pretending that it is a right that we can claim, because it is not. Deluding ourselves about facts which do not exist does not help the situation.

Mr. Patrick Jenkin: If it were a right, there would have been no need for the debate. It is because it is not a right that we are pressing the Government to concede it.

Mr. Ogden: The article that I quoted from the Pharmaceutical Journal specifically used words to the effect that the Secretary of State is denying pharmacists the right to go to arbitration. I was simply putting on record that there is no right in law. One does not claim by right what one has no right to have.
The PSNC is now asking for arbitration on this one issue alone. It is not asking to go back to the old situation in which arbitration was written in for a whole series of possible circumstances. It is asking for arbitration on this one issue. It is a one-off affair. There are precedents for this within the DHSS. Therefore, no one can say that there will be any difficulties in allowing what is requested. It cannot be said that it has never been done before. It has been done, and it is within my memory and


that of the hon. Member for Reading, South.
The PSNC is not agreed on the advantages or disadvantages of a permanent provision for arbitration, under controlled conditions, being written into the chemists' contracts. I discussed this matter on Monday with the chairman of the PSNC. It was quite clear from our discussion that there is no commitment inside the PSNC for arbitration to be written in contracts. This might be one way of getting out of the present difficulties. Therefore I think it could usefully be considered by the PSNC and Ministers.
Look at the time scale. We are now at the end of June. Suppose that the PSNC were asked to consider and to take the opinion of its members on whether they wanted arbitration, not just on this one issue alone but to be written into their agreed terms and conditions, with an agreed arbitrator, so that it was in their regular chemists' contracts, with a new clause to that effect. It might take two or three months for that to be considered. That would take us to the end of September and the beginning of October.
This place is full of rumours that in October we might be interested in other things than pharmaceutical problems—the problems of the ballot box. Whether those rumours be true or no, there will at the end of October be a Government and a Parliament ready to carry on with the government of the country, and to consider whatever advice may be brought to the House and to the Government by the PSNC. If the PSNC were to come back in October asking the Government to consider whether the PSNC should have arbitration, not on a one-off basis but all the time, the Government could then consider it.
The Government are committed to considering in January 1979 the new rates of remuneration that were introduced last January. If the Government were to move some way towards the PSNC, and agreed to review the position, say, on 1st November, that would be some move on the part of the Government towards the PSNC. This could be a way in which the PSNC and the Government could reduce the present difficulties. It is a personal suggestion and one that will stand or fall on its merits, depending on how people regard the proposal.
I thought that the hon. Member for Reading, South was in a rather robust, pugilistic and strident mood this afternoon. It did not really become him. I felt that he was going a little beyond looking for help for the pharmacists, that he was looking for a little party political advantage at the same time, and that he was over-emphasising—it might get him into difficulties in the future—what he felt was the role of Governments, Ministers, legislation and regulations either in creating the problems of pharmacists or in solving them.
The hon. Gentleman sought to blame the Government for creating the problems and failing to provide instant solutions, but he knows that matters are not as easy as that. The Opposition chose the subject for debate. We are not debating it on a resolution in which the Opposition could have spelt out not only the problem but the problems, and also perhaps indicated some of their solutions. They chose not to do so and we debate the Adjournment of the House. The whole House is in favour of adjourning, presumably, as soon as we have all spoken, and I think it would have been better had the Opposition chosen to debate the problems of pharmacists on a resolution instead of in an Adjournment debate.
The hon. Gentleman did not say it in so many words, but I gathered that he fully supports arbitration, and he has committed himself and his party to arbitration on this one issue. He did not tell us whether he supports the suggestion that arbitration should be written into the system. I think that as a result of arbitration he would recognise that there ought to be more remuneration for pharmacists. I gather from the hon. Gentleman that I am correct in saying that. But he said very little about how that money is to be found, and he is the official spokesman of a party which is committed to reductions in public expenditure.
I ask the hon. Gentleman, therefore, to confirm or deny what was written in a very interesting article which appeared in The Observer last Sunday. It was written by Adam Raphael, its political correspondent. The hon. Gentleman has no doubt seen the article, in which it is reported:
The Conservatives are planning public expenditure cuts totalling at least £4,000


million by 1981 for immediate implementation if they win an October General Election.
The article goes on to say that the Shadow Chancellor and the Tory Front Bench spokesmen have been told to prepare a report on how this should be done. It states:
Tory Shadow Ministers who have been engaged in a series of interviews with the Conservative finance team have been told that the total savings will in fact have to be far larger than £4,000 million.
We know that it is public expenditure which pays the remuneration of pharmacists. The article goes on to say:
Particularly sensitive are the proposed increases in school meals, dental and prescription charges, and the proposed fees for doctors' visits and hospitals stays.
In a debate on this subject, it is surely not sufficient for the hon. Gentleman to say "This is the problem, solve it." The hon. Gentleman, who is deserving of the regard of the House, should offer some of his own solutions and spell out their implications. He knows, as a member of the medical profession, that the British Medical Association is officially opposed to any increase in prescription charges. He certainly knows, from his contacts with pharmacy, that the Pharmaceutical Society, long before the time when Sir Hugh Linstead was on the Conservative Benches, was opposed to the introduction of prescription charges, and that later it was opposed to any increase in prescription charges. That was the attitude of the society as expressed by Sir Hugh Linstead in 1961, by Mr. Darling in 1971, and right up to the present day.
The society is quite clearly and firmly committed to the principle that the National Health Service should be free at the time of use. That point should be taken into account by Conservative Members as much as by the Minister. Proper remuneration is only part of the argument. Town planning has as much to do with the location of pharmacies as has Government legislation. Possibly the reduction in the number of pharmacy closures has much to do with the fact that there has not been quite so much town and country planning or town centre re-development recently as in the past.
We know how these things happen. The town centre is cleared, the doctors' surgeries are moved, and the pharmacists follow afterwards. I hope that when the

Minister receives advice from the Pharmaceutical Society about the rational distribution of pharmacies he will look very closely at the question whether the family practitioner committees should be more involved in the decisions on planning applications in local areas.
There is one practical way in which the Minister can help pharmacy. He will know that before Part III of the Medicines Act came into effect, when a member of the public went to a pharmacy and said "This is my particular difficulty", the pharmacist said "You had better go and see your doctor", or he would say "Try this. If it does not work, go to see your doctor". He had three kinds of medicines available—those on general sale, those on prescription only, and another range of medicines, which were more potent, which could be provided only under the close personal control of the pharmacist himself. If that kind of list were now available to pharmacists, it would help pharmacy doctors and the public.
We have discussed some of the problems of pharmacists. I sometimes think that there are almost as many problems as there are pharmacists. But there are also many achievements. I hope that this debate will help rather than hinder progress towards the resolution of those problems and that we can use the same skill and dedication in our parliamentary professions as every pharmacist does in the day-by-day conduct of his or her professional duties.

5.21 p.m.

Mr. John Farr: I should like to back up the remarks which have been made on both sides of the House about the critical position in which pharmacists find themselves. My hon. Friend the Member for Reading, South (Dr. Vaughan) illustrated it very clearly. I echo what has been said—that the real need is for arbitration.
My hon. Friend gave the House several statistics. The alarming figures that he gave can be expressed possibly in another way. In the past 10 years, the number of pharmacists in the nation has declined by 20 per cent. There are now only 9.000 left. Over the past 20 years or so, a rather worrying aspect is that, whereas in 1955 only ·07 per cent. of pharmacists were closing, in 1975 that


rate had accelerated to 2·6 per cent. Clearly there is considerable cause for concern.
What has brought me into the debate is the concern which has been expressed to me by the pharmacists in my constituency, not so much because some of them are closing but because many of them are finding it unprofitable to maintain the usual, rather expensive equipment which a pharmacist is expected to supply. For example, there are oxygen sets. Only a few months ago I wrote to the Minister about this particular difficulty. The return to a pharmacist, of obtaining and renting out an oxygen set is not sufficient to make many of the smaller pharmacists continue to do that particular work. The situation has become very strange in parts of the Midlands, because in many areas there are one or two pharmacists who have plenty of these expensive oxygen sets available for patients. They are now supplying oxygen sets, even though it is not economic for them either. They are covering areas which were formerly covered by other pharmacists who are finding it unprofitable and impossible to continue with this facility.
What has incensed pharmacists so much is that the Secretary of State rejected their claim and refused to allow it to go to arbitration. They are very conscious of the fact that, for example, in Scotland pharmacists have the right to have any claim of this nature independently assessed. In Scotland they have the advantage of the procedure under the Whitley Council. But English chemists, because they negotiate direct, have no such right.
As has been pointed out by more than one hon. Member, other groups with contractual relationships with the NHS, such as doctors and dentists, are able to use review body procedure in order to get an independent assessment of their claims. But that is not available to pharmacists, even though the Government could in effect be regarded as a monopoly employer.
I have already mentioned the difficulty which has arisen in parts of my constituency in relation to the supply of oxygen sets. I have been in receipt of many letters and representations from pharma-

cists in my constituency about this situation. One of them, who operates in the South of Leicestershire, has written repeatedly to me and to the family practitioner committee pointing out the imbalance which is occurring whereby his firm is now having to supply oxygen sets almost throughout the county. The firm now has about 20 oxygen sets authorised for its possession because other pharmacists throughout the county are not finding it possible to finance their purchase and use under the existing financial arrangements.
In addition, there is a situation similar to the one which has been touched on by my hon. Friend the Member for Wokingham (Mr. van Straubenzee). Not only is there a risk of pharmacists either closing or reducing their activities because of the present financial structure, but in parts of the country where specially large residential developments have occurred, where there is a crying need for a new pharmacy, and where possibly a few years ago a new pharmacist might have been willing to go, it is now very difficult to find anyone who is prepared to take up a position in those new areas. As my hon. Friend the Member for Wokingham pointed out, public transport has become no easier in the last few years. There are many areas in the country, which one could almost call deprived areas, where large new housing developments have taken place, where not only are pharmacists not available, but under the existing system it does not appear likely that they will be available.
I strongly urge the Minister to permit arbitration. Like hon. Members on both sides of the House, it seems to me utterly illogical that the Government advocate arbitration in all other forms of industrial disputes but in this particular matter, which is surely one where the Government are in a monopoly position, arbitration is called for more than it would be in the normal way.
I know that other hon. Members wish to speak. Therefore, I should like to conclude with a message from the pharmacist to whom I have already referred. I should like to read a short extract from the letter which he sent. This person lives in Oadby on the fringes of the city of Leicester, and his father started his little pharmacy a number of years ago. The


way he puts it is typical of many pharmacists who are struggling to exist. He says:
Pharmacy has become an obsession, involving every week 60–70 hours of work here since my early twenties and before that seeing the same thing done by my father. It has become a way of life so that my life style, as expressed by my accountant, has become frugal. I live on less money than my Pharmacist employees. The money saved having been ploughed hack into the business, purchasing our premises, refitting, increasing stock where possible, with the result I have a thriving business.
I fully support the remarks which have been made by my hon. Friends as well as the remarks of Labour Members. I urge the Minister to allow arbitration in this dispute at the earliest possible time.

5.29 p.m.

Mr. Doug Hoyle: Although it does not always happen in every debate, I think that on this occasion there is wide agreement on both sides of the House with regard to the plight of retail pharmacists. I agree with my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), that while we thank the Conservative Opposition for tabling this subject for a debate on a Supply Day, we were a little sorry that some of the remarks made by the hon. Member for Reading, South (Dr. Vaughan) were not only partisan but party political points.
It does no good to suggest that this Government are not interested in the plight of small businesses. They are devoting a great deal of attention to them at the moment. My right hon. Friend the Chancellor of the Duchy of Lancaster has spent a considerable amount of time studying them, as has my hon. Friend the Under-Secretary of State for Industry, the hon. Member for Keighley (Mr. Cryer). Considerable help has been given to small businesses in the Budget. For those reasons, I do not think that the approach adopted by the Opposition helps any discussion of the problems facing retail pharmacists.
A number of my constituents have written to me about the problems of small retail pharmacists. Certainly they have problems, and we have to face them, because, as a number of hon. Members have said, the small retail chemist works very hard and very long hours. He per-

forms a duty for the area which he serves that is second to none, and I know that many of my constituents who live in small towns and villages are completely dependent on their local retail pharmacist.
I agree with the hon. Member for Reading, South that because stocks have had to be run down as a result of inflationary pressures, it frequently happens that a person takes a prescription consisting of a number of items to his local pharmacist only to find that he cannot obtan all of it and that he has to go back at some later date to complete it. For many of my constituents that means a return journey by bus, and that puts a considerable strain on pensioners and on housewives with young children. What is more, the person who is ill and obtains a prescription from his doctor wants his needs attended to immediately. This is a problem which will get worse unless we can help retail pharmacists.
I am still pessimistic about the closure rate. I know that it has begun to slow down at long last. However, there have been 4,000 closures in the past 17 years, and we know that today there are only about 10,000 left. It means that almost 30 per cent. of pharmacists have gone out of business. There may well have been some slowing down in this but, when we see the figure coming down to 10,000, we must begin to wonder how long it will be before there are acute problems in certain parts of the country.
My right hon. Friend tried to help the small pharmacist by the redistribution. The large multiple stores such as Boots and the co-ops can well afford this kind of thing. But the case that is being made by the retail pharmacists is that, despite my right hon. Friend's help and the fact that he put in an additional £5 million, because of the reassessment of stocktaking and because there was this reduction from 11 weeks to seven weeks, there is still this problem of the £17 million which went out, which means even allowing for the £5 million, £12 million which is still missing and the retail pharmacists rightly claim should go back into the kitty. They are facing a squeeze. Inflationary pressures are building up and, even though the level of inflation is better than it was, we know that drugs are extremely costly.
One of the difficulties of the small retail pharmacist is knowing which drugs


to stock, especially if he serves a number of general practitioners. Always there is the problem that a GP has a run on a certain drug, and then it changes. What is the pharmacist to do with the stock which he has accumulated? It is certainly a financial problem for the small retail pharmacist, and he cannot understand why, having built up this kind of business, his profession cannot follow the pattern in Scotland and go to arbitration.
My hon. Friend the Minister of State has written to me saying that there is no need for arbitration, and we have heard from my hon. Friend the Member for West Derby that there is no provision for arbitration and that there is a difference between the pharmacist in Scotland and his counterpart in the rest of the country. Nevertheless, I ask the Minister to look at this again. In present circumstances, I think that arbitration would be one way out of the difficulties of the retail pharmacist. The call for this has come from both sides of the House. If my hon. Friend found it possible to re-examine this decision, he would be helping the members of a very hard working community who are very highly valued in the areas which they serve. I know from the letters which my constituents write to me how much they value the services which they get from retail pharmacists.
I also note from the Opposition's motion that we are discussing the problems of pharmacists, which means that we should not confine our attention to the problems of retail pharmacists. That being so, I ought perhaps to declare my interest in hospital pharmacists since I am president of the ASTMS and we organise a large number of hospital pharmacists.

Mr. Ogden: Why not take over Members of Parliament, too?

Mr. Hoyle: There are problems in the hospital service. If we are to provide an efficient pharmaceutical service in our hospitals, we need additional funds pumped into that sector of the National Health Service. The advent of many modern drugs has meant the use not only of more effective drugs but of more toxic drugs. This has created a demand for more expertise and knowledge on the part of hospital pharmacists. I welcome the fact that hospital pharmacists are becoming more involved not only in the choice

of drugs but in the administering of them and in the monitoring of drug therapy generally. It is right that hospital pharmacists should be developing this expertise. But if we are asking for the expertise, we need to put more resources into this side of the service.
This has been recognised by the DHSS. In 1972, it issued a circular advocating an increase in volume in work of this kind by pharmacists in the hospital service, and this has been going on. But one of the problems in building up a more efficient service has been that, although pharmacists have responded to the call for more drug information, any improvements, as always, have had to come out of existing resources. It has also meant for them a higher standard of education and more training, and this means that the problem still remains of how it is to be done out of the available resources. Hospital pharmacists feel that more funds are needed not only for the degree courses which will be necessary if they are to obtain the higher qualifications needed of them but also, if we are to develop on these lines, for the provision of additional staff.
There are two other matters I wish to mention. The first is the need for increased funds for the drug and therapeutical committees that must be developed within the hospital service. There is a similar problem here—it is the old story. That development must come out of existing resources when we need additional resources for it.
Secondly, there is the problem of the application of the Medicines Act 1968 to hospital pharmacy. If we cannot put additional resources into the hospital pharmacy service more problems will be created. The Crown immunity which applied to hospitals in this respect has been removed. This has meant that the medical inspectorate from the DHSS has asked, rightly, for the same standard of environmental control, documentation and hygiene in cases where hospital manufactured medicinal products are produced, as applies to the pharmaceutical industry. I would not argue with this at all, but there is the problem of how it can be done. It is absolutely necessary for the safety of the patient, and hospital pharmacists agree with it. But, can we manage to do all the things that are necessary for the safety of patients if we


cannot get additional resources into that sector of the Health Service?
When we look at the quality control required, it is the same story. If we are to develop it we will need additional resources, and I hope that the Minister will look again at this problem. Hospital pharmacists agree that the safety of the patient must be paramount, and if this objective is to be achieved additional resources are absolutely necessary.
There is a great deal of benefit in debates such as these, which are of a non-partisan nature. We are all agreed about the plight of the retail pharmacists and I have introduced the aspect of hospital pharmacy as well. However, we must consider this against the background of drugs. We should be looking at the high prices of drugs, and the profits that are being made by the drug companies. I hear slight murmurings from the Opposition Benches, and I am sorry to disturb the peace of the House. However, I think that these profits should be looked at because this is an area in which there is great scope to make savings. Savings could be made here rather than at the expense of retail pharmacists or of holding back the development of hospital pharmaceutical services. I believe that this is an avenue to which we might direct our attention.

5.43 p.m.

Mr. Hugh Fraser: I congratulate my hon. Friend the Member for Reading, South (Dr. Vaughan) on raising this matter, and I congratulate the hon. Member for Nelson and Colne (Mr. Hoyle) on at least the first part of his speech. I hope that the Minister, as a Scot, will adopt the principle that has been adopted in Scotland and will allow arbitration.
In my constituency in the last few years 15 small chemists have gone out of business. Any small chemist today faces the problem of holding stocks, because of inflation, and the problem of changes in habit—what the doctors prescribe—becomes far more complex. Running a small business is infinitely more difficult than it used to be and many more hours are spent filling in forms and so on.
Labour Members have criticised us for talking endlessly about cutting Government expenditure, yet wanting to spend

money in this direction. The point surely is that in an over-pressed National Health Service one of the best ways of taking the load off the doctors and the hospitals is through small chemists. When I was a child and I was feeling down I did not go to the doctor; I went to Charlie the chemist on the corner and he told me what to do. Charlie the chemist was usually right. A great load could be taken off the central machine in this way.
The hon. Member for Nelson and Colne talked about pharmaceutical services in hospitals. The point is that we want to make things available to the public outside the hospitals. Some doctors are now setting up their own prescribing services, and this is an enormous burden to the average constituent. Instead of going to the local chemist to get a prescription he has to go to see the medical group. I believe that this should be stopped. It is far better for these matters to be handled by the chemists so that they will be far more readily available to the old lady who at present has to take the bus to see the doctor instead of her equally old friend going once a week to pick up her prescription from the local chemist.
I thank the hon. Member for Liverpool, West Derby (Mr. Ogden) for what he said about the excellence of the pharmaceutical profession. Here again more should be done. I think that there should be a higher degree of qualification. I agree that greater powers of prescription should be given to the home chemist. This is all to the good. The key is that none of this can happen if the small chemist disappears.
The root of this debate is the disappearance of small chemists. There is one simple way out of it. The Government should give way, and allow arbitration, on this complicated but essentially simple matter of keeping the small chemists in being.

5.48 p.m.

Mr. George Park: My sole interest in this debate is the one fact on which the whole House is agreed—that far too many chemist shops are closing. They do not close according to any predetermined pattern, but in closing they leave huge gaps in the Health Service in both rural areas and towns alike.
Before we have any discussions on the distribution of chemist shops, the Department must settle the present disagreement. This argument has been going on for two years. That is far too long for any argument because both sides involved tend to get into entrenched positions and repeat the same old arguments. One way out is to bring a fresh mind to the problem, to have a fresh look and to see if a solution can be found.
There is general agreement that the cost of replacing drugs for the chemist is 20 per cent. to 25 per cent. There is also agreement that the return that chemists get on their capital is considerably below that. In effect, in running this part of his shop—if these figures are true—the chemist is subsidising the Health Service. I do not think that we should ask him to do that.
The chemists say that this is one of the reasons why these shops are closing. I gather that the Department is not entirely convinced about this. But we must disentangle this and discover whether the rate of return on capital refers solely to the dispensing side or whether it refers to the complete activity in the shop.
I submit that out of a possible arbitration there should emerge a clear-cut decision to the effect that remuneration received by chemists in fulfilling prescriptions should stand on its own and should not require any subsidy from the chemist. In other words, the payment made by the Government should cover this part of the National Health Service. If the chemist concerned is not a very good business man and loses money on the other aspects of his chemist shop, that is his affair. Certainly the Government could not in that case be blamed for the closure of the shop.
I do not consider it suitable to insert within the provisions arbitration as of right. Although I believe that there should be arbitration, I feel that arbitration as of right should be considered only after we have settled the present difficulty. The argument has now taken place for two years, and that is long enough. We are all receiving far too many letters from constituents saying that people have to take two buses to get a prescription filled. Although I appreciate the view taken by the Department, if the position

is as befuddled as it now is after two years of discussions, surely both sides should go to arbitration, state their respective views, and then let the arbitrator decide the way out.
I hope that at the end of this process the fulfilling of prescriptions will not cost the chemist money, but will yield him a reasonable rate of return on his capital. If that happens, I believe that it will remove the current spate of criticism which has been directed at the Department.

5.53 p.m.

Mr. Robin Hodgson: I agree with the hon. Member for Coventry, North-East (Mr. Park) that we are all receiving far too many letters from constituents complaining about the declining state of our pharmacy services. I also agree, as we can all see in our constituencies, that too many chemists are closing their premises.
I wish to take up one point made by my right hon. Friend the Member for Stafford and Stone (Mr. Fraser) about the preventive role of the pharmacist. In a debate two or three weeks ago, to which the Minister of State replied, we discussed extensively the importance of taking some of the strain off the hospital services by improving the general practitioner services, and of taking some of the strain off the GP services by improving the health visiting service in the community. In that preventive role the pharmacist has an important, if unofficial, role to play as adviser, informant and articulate and experienced professional in helping people with minor ailments to avoid having to trouble overworked doctors. The Minister of State is very much aware of these factors because he referred to them in the earlier debate to which I referred.

Mr. David Crouch: The role of the pharmacist is a tradition that dates back over 100 years. It involves the feeling in the medical profession that the pharmacist is there to help doctors at the point of delivery of medical care. Therefore it is not a new idea that members of the medical profession should expect the pharmacist to give some assistance to the patient who goes to them direct.

Mr. Hodgson: My hon. Friend has underlined the point I was seeking to make.
The second point I wish to make relates to the decline of communities—particularly in the urban areas, one of which I represent. The Government Front Bench has wept crocodile tears over the decline of our city and town centres. The fabric of those centres is held together by a balanced variety of shops—green grocers, hardware shops, pharmacists and many others. If that tangled skein of services is broken and if certain of those shops close, the whole balance of the community is lost and the area begins an irreversible decline. It is important that we should consider carefully the effect of the continued rate of closures on the fabric of our urban and inner city centres.
My hon. Friend the Member for Reading, South (Dr. Vaughan) said that the people who use pharmacists to a great degree are the young mothers with children, and also elderly people. The number of the very elderly in our country will increase faster than will the number of the retired. In the next 15 years, the number of elderly people, those between 75 and 85, will increase by nearly one-third, from 2·2 million to 2·8 million; those over 85—the oldest of all—will increase by nearly 50 per cent., from 500,000 to 740,000. Those are the people who are least able to get about and who make the most use of doctors' prescriptions. The decline in the number of pharmacists obviously will affect them to the greatest degree.
I have read the correspondence which the Secretary of State for Social Services placed in the Library about his negotiations with the pharmaceutical services negotiating committee. It is a complicated matter, but it is apparent that there are two points which the Secretary of State has not fully considered. The first relates to the effect of inflation on drug costs. The rate of return on capital employed is affected when the rate of inflation of drug prices is very high.
The Secretary of State's letter to the PSNC of 28th February had two aims. On the one hand, it appeared to be trying to withdraw some earlier promises or vague suggestions of improved rates of return made to the PSNC. It also said:
The return for Review Board contracts is based upon capital assessed at historic costs

after depreciation, whereas the capital employed by retail pharmacists on NHS dispensing is continuously updated to maintain its value in real terms.
It is true that it is updated in real terms because drugs are continuously being replaced at higher prices. Nevertheless, inflation has a serious effect on the working capital requirements of the pharmacist. The pharmacist has to find an ever increasing amount of money to fund the holding of stocks in respect of the same volume of drugs. The point made by the Secretary of State in that letter does not answer the PSNC's criticism.
The second point I wish to make concerns the subject of overheads. Where there is a relationship involving labour, drug costs and overheads—a relationship that is altering all the time—and the return on capital employed is being held steady, one risks squeezing profitability. This is what has happened because chemists' overhead costs have risen particularly sharply, particularly because of the increase in local rates. In my own metropolitan borough the rates have risen two-an-a-half times in the past five years. The effect of that ballooning of overheads depresses profitability of the chemist, and it will eventually drive him out of business if he is not prepared to accept a lower rate of return. I do not believe that the Secretary of State has taken these matters sufficiently into consideration when rejecting out of hand the request of the PSNC for arbitration. He has not even been prepared to consider some alternative suggestions which that committee has advanced, such as a basic premises allowance.
The effect in my constituency is very similar to what has been outlined by other hon. Members. In a small urban constituency we have lost three pharmacists. Two of them cover new housing estates and one is a High Street shop. The people who live on the two large council housing estates will have to travel considerable distances to be able to have their prescriptions filled. It is not good enough for the Minister of State to say that the evidence of pharmacy closures is not clear, because it is perfectly clear. Every contributor to this debate has referred to this point. Each one of us has seen chemists closing and we all have letters from constituents to back up the point.
What is the attitude of the Secretary of State? In his letter of 16th May he said:
The effect of the differential scheme"—
referring to the treatment given by the Department to small pharmacists—
should provide material evidence as to whether the present level and method of distribution of remuneration are sufficient to sustain an adequate spread of NHS dispensing services for patients.
The Secretary of State is saying that until the stable has burnt down he is not prepared to do anything. He says that if he then finds that all the chemists have closed he will be prepared to do something about it. We say that the right hon. Gentleman has shown a lamentable lack of attention in many areas of his departmental responsibilities and that this is evidenced by the many debates and Questions that we have had in the House in the past few months. He now has an opportunity, instead of waiting until the horse has bolted before shutting the stable door, to tackle the problem quickly and authoritatively by referring the dispute to arbitration as requested by the PSNC.

6.0 p.m.

Mr. John Ovenden: At the beginning of this Session I tabled Early-Day Motion No. 16 on the need for a comprehensive pharmaceutical service. The motion called attention to the importance to the community of retail chemists, expressed concern about the rate of closures and called upon the Government to make available sufficient funds to ensure a comprehensive pharmaceutical service. In five lines, the motion summed up everything that has been said in the debate. An important aspect of the motion is that it has been signed by 269 Members from all parts of the House and I was sorry to hear the rather partisan note struck by the hon. Member for Reading, South (Dr. Vaughan) at the end of his speech. There is no monopoly of concern on one side of the House about this issue. I hope that now that the hon. Gentleman has heard some of the debate he will accept that.
Many of us welcome the fact that the Opposition have initiated the debate, though some of us regret that it is on a motion for the Adjournment and not on a commendable motion such as Early-Day Motion No. 16, which I would have lent

the Opposition for the day if they had wanted it. There is a serious decline in the pharmaceutical services in this country and those services are a vital and often unappreciated part of the National Health Service.
There were 277 closures in 1977 alone. A total of 138 new chemists shops opened, and I am sure that my right hon. Friend the Minister of State will refer to that, but we are still left with a deficit of 139 and, although the rate of closures has been reduced, we must remember that we are starting from a smaller base. We have fewer than 9,000 retail pharmacies in the country and we are moving towards a very serious situation.
It has been suggested that pharmaceutical remuneration is not the sole reason for the closure of chemists shops. I have no doubt that that is true. We have relied for our pharmaceutical services for a long time on the fact that chemists have been able to carry on profitable sidelines. Often profitable retail businesses have been carried on in the same premises. Unfortunately, the changes in retail practice and the growth of supermarkets have made the running of such sidelines impossible. We can no longer rely upon those businesses to subsidise our pharmaceutical services. If we are to have the sort of service that we all desire, we shall have to make sure that the money is made available from public funds to allow that service to continue without the hidden subsidy that has existed in the past.
It is not just the overall decline in the number of pharmacies which must worry us. We should also be concerned about the disparity in different areas of the country. For example, there are 1·3 pharmacies per 10,000 people in Oxford-shire, but 2·4 in East Sussex—nearly twice as many. There are also wide disparities within counties. The position in Kent has been mentioned. In an area of 400 square miles to the east and south of Rainham, in Kent, there is not a single pharmacy. Villages are isolated from pharmaceutical services, and this is most serious.
It is time we recognised that we need to reorganise our services to provide pharmacies in the new areas of growing population as well as in the rural areas, but that cannot be done under the present


financial system and within a pharmaceutical service which is starved of funds. There is a desperate need for initial service grants to encourage the establishment of new services where they are needed, and that sort of money cannot be found out of the package that is available to the profession from the Government. We all welcome the support that has been given to small pharmacies, but it is no substitute for the availability of sufficient funds to ensure a comprehensive overall pharmaceutical service.
As has been said, pharmacies provide a vital public service. They provide a prescription service which is sorely missed when pharmacies close, and the people who are hit hardest are the people who need pharmaceutical services but have no personal transport, and those who rely most upon pharmaceutical services are the sections of the population lacking personal transport—the young, mothers with young children, the elderly the sick and the disabled. The categories with the greatest need for prescription services are those that have problems with personal transport as well. They are the people who suffer most.
The chemist shop provides many other important services, including the provision of medicines that, although not dispensed under prescription, are restricted and can be supplied only by registered pharmacists. When one moves into an area where there is no pharmacy, one soon finds that many medicines are not available. This tends to put much greater pressure on the doctors' services, and, as hon. Members have stressed, we want to relieve the pressure on doctors' services as much as possible. The closure of pharmacies will tend to increase that pressure.
In the areas where pharmacies have closed, doctors have taken over the dispensing of medicines. The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to this point. It fills a gap, but I wonder whether it is a desirable practice. Should we expect the same professional man to prescribe and dispense? Should we remove the very valuable check that exists upon doctors prescribing medicine? That is going by the board as pharmacies close and doctors do their own dispensing.
I hope that the Minister of State has got from the debate the message that there is deep concern on the Labour Benches as well as on the Opposition Benches about this problem. I do not believe that this is the right forum in which to debate and resolve industrial disputes. The right place to resolve such disputes is round the negotiating table. If they cannot be resolved there, the proper place for them to be resolved is through arbitration. We cannot resolve the dispute today. I hope that my right hon. Friend will take the message that the dispute must go to arbitration and must be resolved.
We have been told that arbitration is not appropriate because there is no agreement between the parties about what the dispute is. I have never heard that argument used in an industrial dispute. If there is a disagreement about what each side is saying, the best way to resolve it would be for each side to put a statement to the arbiter so that he may decide what the dispute is and how it can be resolved.
We have had two years of negotiations and arguments about this issue. If we have not yet got to the position where one side can find out what the other side is talking about, we shall not get much further if we continue along the same road. That is the most overwhelming case for negotiation; and I hope that the Minister will accept that this is the only way that the dispute can be resolved.

6.8 p.m.

Mr. Robert Boscawen: I agree with the hon. Member for Gravesend (Mr. Ovenden) that we all recognise the complex nature of the dispute. I do not intend to make light of the difficulties faced by the industry, the negotiating body and the Government, but I am concerned about the Government's case for not going to arbitration and we ought to examine that case for a few moments.
The Government have made out a favourable case for what they are doing. They have explained carefully that they have introduced the new system of differential on-costs to help small pharmacies at a cost of £5 million. The Government say that this should be given time to work. They have also spelt out the bargain that the pharmacists have with the NHS, whereby the cost of NHS


drugs is reimbursed fully, as is part of the cost of overheads and labour. They say that a single-handed dispenser has about 85 per cent. of his time reimbursed under the present system. On the surface, he appears to be favourably treated.
Furthermore, the Government maintain that the pharmacist is given freedom from interference by the Government in the way in which he carries out his work, within his professional rules and qualifications. He is given freedom to choose the conditions of his work, the hours of his work and the position of his shop.
That is the Government's case. They maintain that they are helpful to the pharmacist, including the small pharmacists, and fair to the taxpayer. Thus, it is the more extraordinary that when that case is challenged by the industry, largely on technical grounds, the Government should not put their terms to the test and go to arbitration.
Why is that so? I find the Government's reasons not very convincing. In principle, the Government are not against arbitration. They say that arbitration should not take place yet as the negotiating committee has not defined the areas of disagreement precisely enough. They want more information. The Secretary of State has asked for much more information from the PSNC. They want to know much more about its complaints before they agree to negotiation.
I shall now be unreservedly partisan. Has not the PSNC tried for two years to produce the evidence—namely, that pharmacists are not receiving proper remuneration for the inflationary effect on replacement of drugs stocks? It seems that the disagreement between the industry and the Government is not on precise technical calculations but much more on a doctrinal issue that has hardly been touched upon in the debate.
We are dealing with a major part of health provision. It is the major part that remains within the private sector. The issue is really about the extent to which the near-monopoly customer should have the right to determine the shape, size and distribution of the remaining retail pharmacies without taking them all into the ownership of the National Health Service. Is not the area of disagreement really about whether a private professional individual may get a fair reward for his own services or whether

he will be quietly driven from the scene, as happens so often in other small retailing businesses, and replaced eventually by large, central health-centre pharmacies that will provide drugs direct from the NHS to the individual without going through the hands of the private sector?
That issue must be considered in the light of the debate. As the smaller retail pharmacists become fewer and fewer, will not the Government have in the end to step in and supply the essential service to the public by some central means, possibly through health centres or local district hospitals?
Is not the Government's case given away when they argue that they cannot finance the working cost of replacing drugs to meet the inflationary spiral in the private sector, because if they did they would, in effect, be assisting private businesses towards their working capital? They say that if they were to assist private businesses in that way they would require in return their Danegeld, which would be radically to change the freedom of the retail pharmacist to practise where and how he wants.
There is a philosophical divide even though it has been hidden to some extent. Are we moving towards a State service as an appendage to the NHS, or do the Government want to retain pharmacies in private hands, spread evenly where they are most needed and where they are most desired?

Mr. Ogden: rose—

Mr. Boscawen: No. I know that other hon. Members wish to take part in the debate. The hon. Member for Liverpool, West Derby (Mr. Ogden) had his say earlier.

Mr. Ogden: The hon. Gentleman has made a serious charge against the Government.

Mr. Boscawen: It is a short debate and I must be allowed to continue. The hon. Gentleman has made his speech and the Minister will reply. If the case is wrong, the Minister will say so when he replies. I do not have any quarrel with what the hon. Gentleman said, as he made a fair and knowledgeable speech.

Mr. Ogden: I trust that my right hon. Friend will take up the lion. Gentleman's argument when he replies.

Mr. Boscawen: The truth is that smaller retail pharmacists are going out of business in dangerous numbers, especially in rural areas. If that is denied by the Government, let them consider how few young people are going into the retail profession. Let them consider how very few young people are buying their way into retail pharmacies. Some of the older chemists want to retire, but in many instances they are locked into their businesses by disastrous rates of remuneration. They have lost the good will on which they would like to retire, and they cannot sell.
The public are suffering both from the fact that there are no young people coming into the retail profession and because we are getting an ageing population among the existing retail pharmacists. About 30 per cent. of retail pharmacies are now in the hands of pharmacists over the age of 60 years. I do not wish to labour the point that many hon. Members have made that the reduction in the number of small neighbourhood pharmacies is most harmful in both rural and urban areas. Help the Aged has made some most telling points in the document that it circulated to all hon. Members. It makes a plea to the Government to agree to the procedure of arbitration immediately
in order to prevent further hardship to our elderly people.
I and other hon. Members endorse its plea.
I hope that the Government will give a firm recognition of the value of the small, individual neighbourhood pharmacist and not go along the road on which I fear they may be going. I fear that the Government would not be sorry if all small pharmacists disappeared and the State took over the whole machinery.

6.18 p.m.

Mr. Ivan Lawrence: In general, I think that we have seen in this debate the spirit of what my hon. Friend the Member for Chelmsford (Mr. St. John-Stevas would call ecumenicalism. Therefore, I wish to be even fairer to the Government than I usually am. It is fair to say of the Government that they are not ignorant of the problem. It is fair to say of the Government that they have done something to try to relieve it, as I think the Minister will say when he replies.
To be fair to the Government, however, they have been in power for four years. During that time there has been an unacceptable number of closures. During that time the need for more pharmacists has been growing as the number of elderly people has been growing. During that time the pharmacists who have remained in business have been increasingly demoralised and have become increasingly angry. During that time the profit margin available to pharmacists in business has been declining. The whole argument has been dragging on for two indescribable years, for which there can be no possible excuse.
I am trying to be fair to the Government.

Mr. Ogden: Try a bit harder.

Mr. Lawrence: I am trying to state the position as it is. I should like to read from a letter which was written to me by a pharmacist in one of the villages in my constituency. He says:
In our own pharmacy, our accounts for 1976–77 show, for the first time ever, a loss in our trading position. This is due in no small part to the lack of profitability in the National Health Service side of the business.
I ask the Minister to take that on board, because in his letter to each of my pharmacists the Minister suggests that loss of profitability is not a substantial feature.
The letter goes on:
If this present trend continues, then a village with nearly 5,000 people living in it will be without a chemist in the future as we are not prepared to subsidise the Health Service ad infinitum. Our standard of living is seriously threatened and at present we feel totally frustrated with the attitude of the Secretary of State".
The position has now been reached when something more has to be done than the Government have already done. They must try to break this log jam. Surely they undesrtand that.
I should like to make two points in relation to my constituency which I think the Minister should take on board. First, national figures or the ratio of pharmacies to people or for the rate of closure do not necessarily reflect the true situation in particular areas. That point has been made by other hon. Members. For example, the national ratio of pharmacies to population is 1:5,100, but in the Burton division it is one pharmacy to 8,500 people. Many villages have no


pharmacy at all. Some have no pharmacy, no general practitioner and no branch surgeries. I refer to such villages such as Stretton with a population of 4,300 Rolleston with 3,800 and Branston with 3,800. The result is that about 40 per cent. of the population of the Burton division—50,000 out of about 120,000 people—are cut off completely from access to a chemist within a reasonable distance. That is completely unacceptable, and the national figures do not reflect that situation.
In additon, rural areas are receiving more and more old people and it is no longer possible for many of the elderly, young mothers, the handicapped and the disabled to afford to travel on buses, let alone to own cars.
The second point, which really follows from the first, has not really been made often enough in the debate. It is necessary not only to stop further closures but to set up new pharmacies. That will not be achieved if we have fewer pharmacists in training. We need new incentives from the Government for new pharmacies, not just to keep the present pharmacies going.
It may be that the Government have a strong case. If so, that is all the more reason to allow this matter to go to arbitration. Then they can prove for all the world to see the excellence of their argument. Then the pharmacists, being reasonable, devoted public servants, will cool their anger and their morale will rise. That is all that we are asking for. It is what the Government always themselves demand in industrial disputes. What on earth frightens them from going to arbitration on this occasion?

6.23 p.m.

Mrs. Audrey Wise: It would be unfair for the House to blame the Government for the decline in the number of pharmacies. This matter has not suddenly arisen; it has been going on for a considerable time. That having been said, we recognise that the Government will have to do something about the situation. We may not blame them for the decline, but we are entitled to look to them to arrest the process and to improve the situation. Genuine concern is widespread.
The Association of Community Health Councils expressed its concern to the

Royal Commission on the National Health Service. The association gathered evidence from no fewer than 70 community health councils. I think that when 70 community health councils express concern, the Government must bend an ear to it.
In 1952 Coventry had 87 pharmacies, to serve a population of 258,000. Now it has only 58 pharmacies to serve a population of 337,000. That, to save my right hon. Friend the Minister working it out, means a decline of almost halt in real terms. We had one chemist for every 3,000 people. Now we have one chemist for every 5,800 people. This is a very serious matter. Although I do not join in any chorus of condemnation, I must join in the appeal to the Government to do something about this matter.
I am sure that part of the decline in the number of chemists' shops can be attributed to the business in profitable lines being taken by supermarkets and so on, as has been pointed out. However, it is not good enough to look only at the cause. We must now look for a cure.
I suggest that at some time the Government might look at the profit being made by pharmaceutical manufacturers, which seems excessive. Perhaps some balancing should be done to give a fairer rate of return to small businesses in the retail sector. The Government might counterattack on that matter. I appeal to my right hon. Friend to meet the debate sympathetically.

6.26 p.m.

Mr. Michael Shersby: The hon. Member for Liverpool, West Derby (Mr. Ogden) said that unfortunately there was not a pharmacist in the House. Of course, he is right. Therefore, I hope that I may offer the House the next best thing as I am in fact a pharmacist's mate. If I have an interest to declare, Mr. Deputy Speaker, no doubt you will allow me so to declare it.
We have had an interesting debate, which I warmly welcome. I have only a couple of minutes at my disposal. The situation in my constituency, as in other constituencies, is very grave. One pharmacist in my constituency recently told me that, on the present basis of payment, his profit last year was 1·9 per cent. and that, although it may rise slightly


due to the changes which took place in 1977–78, it is unlikely to exceed 2·4 per cent. That is totally unacceptable not only to retail pharmacies but to almost any business, be it retail or wholesale. It simply cannot go on.
The Minister knows full well from the debate tonight that the House wishes the Government to allow this matter to go to arbitration. It is no use the Government saying that they do not know what the chemists' case is. They must know. If not, it is their duty to find out pretty quickly. Every hon. Member who has spoken in this debate—it has been a good one, lacking in party acrimony—has made it clear that the House expects the Government to solve this problem. The Government are in power. They are responsible for ensuring that this branch of the National Health Service is able to discharge its duty to the public.
People are very worried because they see not only pharmacies closing but a lack of dentists. I had an Adjournment debate only two months ago about the village of Harefield in my constituency, where there is now no longer a National Health Service dentist in practice. I hope that I shall not have to come back to the House shortly on an Adjournment debate because there is no pharmacy available in my constituency. This is a serious matter to which the Government must pay urgent attention.
The hon. Member for Nelson and Colne (Mr. Holye), in an unhappy departure from what I regarded as a pleasant debate, referred to the vast profits made by the pharmaceutical industry. I admire our pharmaceutical industry. I suggest that no other pharmaceutical industry in the world ploughs back so much of its profits as the British pharmaceutical industry to develop new drugs, to the enormous benefit of our population. Therefore, I hope that we shall not hear any more on that score.
I say to the Minister, quite simply, get cracking. We have sat here long enough listening to excuses. We all know what the problems are. If the Minister does not know, we can tell him. We expect results, and we expect a reply tonight to the effect that this issue will go to arbitration without further delay.

6.30 p.m.

Mr. Patrick Jenkin: When one finds in a debate that my hon. Friend the Member for Burton (Mr. Lawrence) and the hon. Member for Coventry, South-West (Mrs. Wise) are speaking virtually with a single voice, one is forced to conclude that either the millennium has arrived or they have a very strong case indeed. The millennium has not arrived, but I think that the Minister can be left in no doubt whatever of the view of the House on this issue of the pharmacists' contract.
Though this debate, to which we have devoted the half-day at our disposal, is entitled "The Problems"—with an "s"—"of Pharmacists", and many speakers have referred to the difficulties which they face from the supermarkets and elsewhere, the debate has concentrated largely on the dispute between the Department and the pharmaceutical services negotiating committee over the remuneration for NHS dispensing.
I think it is significant that we have had a large number of speakers in a relatively short debate and every single speaker—I hope that the Minister of State has taken this on board—has urged the Minister to go for arbitration.
I think that the hon. Member for Birmingham, Yardley (Mr. Tierney) put his finger on one of the causes of the difficulties which we face, and that is the attitude of the right hon. Gentleman's Department to the pharmacy trade. "Mistakenly", said the hon. Member for Yardley, "the retail end is not considered important". One has only to remember the row in January of this year over the Medicines Act regulations, when apparently no account at all had been taken of the relabelling requirements of the retail pharmacist.
There is the more recent case of the joint effort by the Department and the BMA to limit drug prescribing. This is something that is going to have a profound influence on retail pharmacists, and yet they were never even consulted on this matter at all. I think that the hon. Member for Yardley laid a true bill.
The nub of the pharmacists' case on the contract was very well put by my hon. Friend the Member for Walsall, North (Mr. Hodgson) and can be stated, briefly, as follows—and I hope that the


Minister will not take refuge in the rather foolish pretence that the Government do not know what the case is. The profit margin on NHS prescriptions is based, among other things, on the average capital employed. This includes an estimate of the average stockholding of drugs. The prices of the drugs which the pharmacist has to buy have risen sharply, much more sharply than the general level of the retail price index. So, forced by the shortage of cash, they have, over the last few years, had to cut back on the levels of stock which they hold. My hon. Friend the Member for Reading, South (Dr. Vaughan) gave the figures—from 11 weeks' supply to seven weeks' supply.
The result has been, under the contract, that this gave a reduced estimate of the capital employed and, therefore, a reduced profit. It also had the effect, for the customer, of reducing the ability of the pharmacist to supply in the quantities required, and, therefore, there has been a reduced service to customers.
It is this vicious spiral which is the real nub of the problem. If profitability is cut, the cash flow is cut. That must lead to still lower stocks as chemists trim back to live within their cash availability, and that gives rise then to a further cutback in the gross profit margin. The result, as speaker after speaker has said, is a steady increase in the number of closures of pharmacies.
There is to be no let-up this year, despite the more encouraging figures in the first three months. The estimate of drug costs in 1978 is that they will go up by some 21 per cent. as against the general estimate of the Government of single-figure inflation, and this can only further exacerbate the trouble.
Nobody, of course, could argue that it is for the Government to supply the capital for the expansion of the business, but surely to goodness the formula must provide for the maintenance of the level of the business in NHS prescribing. This it is not doing, and this is what ought to be done. The case is exactly the same as that—I say this in one sentence, and no more—when the Chancellor of the Exchequer recognised for corporation tax purposes the need for stock financing relief. It was exactly the same point. In order to maintain the level of the business, one has to give special relief in periods of high inflation.
The Minister has tried, in his correspondence with hon. Members and in his notes to the House, to throw dust in our eyes, and we had all the business about redistribution. He has on other occasions said that the question of reallocation of funds between large and small pharmacists is an entirely separate exercise. But it really was going beyond the limit when the Department put out the Press release on 13th December:
Agreement reached on pharmacists' remuneration".
Many of the Press took this up and thought that this whole problem had been solved, but it had not. It was only about the redistribution element. There was nothing in that about the question of stock financing.
We have had mention of the £5 million extra put in, but the hon. Member for Nelson and Colne (Mr. Hoyle) dealt with that. I shall not weary the House with those figures again, but it is £5 million plus, but some £17 million minus as a result, over the three years, of the change in the profit margin.
There is the claim that the Government do not know what the case is.
It seems essential to have the area of disagreement precisely defined before arbitration could be considered.
So wrote the Minister of State to my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) a few weeks ago. I hope that the Minister does know what the case is about and that we shall not have any more of that argument.
As the hon. Member for Gravesend (Mr. Ovenden) rightly said, surely if there is confusion, and there is an argument which has gone on for two years about this, and neither side seems to be able to make the other understand its case, that is a classic case for arbitration, for a third, fresh mind to come in, look at the problem and reach a conclusion.
It is not as though that would be something new. As the right hon. Gentleman must know, one of his predecessors did exactly this. Kenneth Robinson, when he was Minister of Health, said this—and I am quoting from the Pharmaceutical Journal, which is the only version of what he said that I have been able to find. Writing to the PSNC, Mr. Robinson said:
the Minister would naturally regard it as preferable that his representatives and yours


should achieve a fair and mutually acceptable settlement through the normal negotiating process which has in his view served both sides well in the difficulties of the last few year…but in the present circumstances, and in view of the anxieties which you told us were felt by your committee, if you do decide to seek the Minister's agreement to a joint approach to an agreed arbitration the Minister would consent to such an approach.
Well, if Mr. Robinson could do that, why on earth cannot present Ministers do it?
The situation has many parallels, and the House has today made clear what it requires. The House is reflecting the public anxiety. The petition presented last night by my hon. Friend the Member for Beeston (Mr. Lester), with nearly a million signatures, collected in less than four weeks, is evidence that the public are seriously concerned about the decline in the number of community pharmacies.
The figures have been quoted over and over again. The Minister may take refuge in the recent slowing down of the rate of closures, but again, to quote the Pharmaceutical Journal of 1st April:
It is as yet too early to be able to predict a continuing improvement.
The pharmacists have been greatly provoked, but they have shown great responsibility. The Minister will know that they had that dramatic Sunday meeting on the premises of the Pharmaceutical Society on 2nd October last, and at the end they said they were not going to strike. As The Daily Telegraph put it,
Chemists will not strike because their moral sense will not allow them to cause public suffering to achieve their ends. Mr. Robert Worby, chairman of the Pharmaceutical Services Negotiating Committee, said yesterday.
Would that that might be imitated elsewhere in the Health Service—but that we shall have on Monday.
It really is now up to the Government to respond constructively to the demands that have come from all sides of the House. My hon. Friend the Member for Wokingham (Mr. van Straubenzee) said—and I think I quote—"The Minister has resolutely set his face against arbitration." But what is the Minister actually saying? In the same letter to my right hon. and learned Friend, he says that he
has not ruled out arbitration in principle.
I would reword my hon. Friend's statement and say that the Secretary of State

has irresolutely set his face against arbitration. I really must ask: why cannot the Minister now say "Yes, very well, we agree. We accept the will of the House and we agree to arbitration"?
I am sure that neither the Minister nor the Secretary of State wants the reputation of being someone who yields only to pressure and never to reason. Here is a chance for the Minister to make it clear that he wishes to preserve his reputation as a man of reason, a man who is open to persuasion and who, when faced with a case as strong as that which has been made from all tides of the House today, will accept it with good grace and go to arbitration.

6.40 p.m.

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): I reiterate the view already expressed that it has been a good occasion on which to have a debate. We must thank the Opposition for setting aside a half-day in order to discuss the affairs of pharmacists, particularly retail pharmacists. My hon. Friend the Member for Nelson and Colne (Mr. Hoyle) was the only person to stray outside that subject, although my hon. Friend the Member for Coventry, South-West (Mrs. Wise) also mentioned other aspects.
In the past year, hon. Members on both sides of the House have expressed a greater interest in general practice pharmacy than perhaps at any time since the inception of the National Health Service. This is excellent. It allows us to review the situation. But a great deal of what is said about pharmacy is misinformed or ill-informed.
I welcome the opportunity to make what I regard as an accurate statement of the position. I stress and reassure hon. Members that the Government fully recognise the value of the local pharmacy. When I spoke to the pharmaceutical conference in Sheffield last year, I described our network of pharmacies as one of the prime assets of the National Health Service. It is more than a prime asset—it is essential. We do not see the pharmacist's role as being limited to dispensing National Health Service prescriptions. Pharmacists offer an authoritative source of advice on drugs and their use to both doctors and patients. They must be regarded as an integral and important


part of the primary health care team, and we wish to develop the role of those teams.
No other profession is as widely distributed as the pharmaceutical profession. What profession could supply a walk-in service on a street corner in every tiny community? That is one of the first essentials that we must meet. I share the general concern of the House that over the country as a whole the number of pharmacies is declining. Naturally, we wish to do something to stop that decline. The present position arises from a large number of causes, some of which have been mentioned. For example, market forces have been the prime factor in the creation of the existing distribution of pharmacies. By and large it is an adequate, if not ideal, distribution which serves the needs of the majority of the population. I stress the word "majority" because there are sections of the population which even today have an inadequate provision of pharmacies.
Pharmacies are usually near doctors' surgeries or in shopping areas—the sites preferred by patients. However pharmacies are distributed, and no matter how near the nearest pharmacy is, there will always be some people, the less mobile and particularly the elderly, who will find it hard to get to a pharmacy. I urge people to assist elderly people to obtain their prescriptions, whatever is the ultimate outcome of the problem. Obtaining an elderly neighbour's prescription was the kind of unobtrusive community self-help that we had in mind when we launched the successful good neighbour campaign.
As the right hon. Member for Wan-stead and Woodford (Mr. Jenkin) said, the debate has been dominated by the distribution of pharmacies because they are closing and the financial arrangements which might limit those closures or reverse the tide. Already this year 100 new pharmacies have opened. The position, therefore, is not one of a total desertion by the profession of the retail trade.

Mr. Shersby: Will the Minister give way?

Mr. Moyle: I shall not give way. I have only 20 minutes left. My record in giving way in debates is good. I shall not give way this evening.
Many pharmacies are still flourishing in the retail trade. But one of the major factors in the decline in the number of pharmacies in recent years is the change in shopping habits. This has been mentioned in the debate and there is agreement about it. The change of habits involves the growth of supermarkets competing for sales of goods such as toiletries which traditionally are sold in pharmacies.
Movements in populations cause a problem throughout the Health Service. As my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) said, we must also consider the redevelopment of city centres. I am sure that the Secretary of State for the Environment will take my hon. Friend's remarks to heart and consider that aspect of the problem.
We must also consider the movement of general practitioners which sometimes leaves pharmacists stranded. Sometimes there are too many pharmacies for modern conditions.
National Health Service income now represents 60 per cent. of the average pharmacy's turnover, compared with about 40 per cent. a decade ago. This means that we have a special responsibility as a Government to ensure that the National Health Service contract gives pharmacists a fair deal. It is clear that the flat-rate system of payment for NHS dispensing, which was operated at the wish of the profession from 1964 to the end of last year, made the smaller pharmacies increasingly vulnerable to the pressures that I have described. I confess that, looking back, I am sorry that the system of remuneration was not changed earlier.
There is a decline in the number of pharmacies. There might have been a slowing down in the rate of decline in the last two years, although I do not wish to make too much of that at this stage. The net decline in pharmacies in 1977 was 138, the lowest number since 1963. That is only relatively cold comfort. It compares with a net loss of 215 in 1976 and 288 the year before.
I do not make too much of the trend this year. We shall have to wait and see how it develops. The trend of the last two or three years has continued this year. Provisional figures for the first five months of this year show a net loss of 59 pharmacies, compared with 80 in


1977. This leaves us with 10,750 pharmacies. The closures have caused inconvenience and individual difficulty for many sections of the community and have accentuated the problems of the less mobile and, therefore, the elderly. We are anxious about this problem in the Department. We shall watch the situation closely.
It is interesting to note that, of the 307 pharmacies which closed in 1977, only four were more than one mile from another pharmacy. Of the 169 which opened, six were more than one mile from their nearest neighbours. That shows that there are trends which are to the advantage of the network as well as the trends that we have been discussing today.
With the agreement of the pharmaceutical services negotiating committee, additional financial help is already provided to small pharmacies serving areas where there are no other pharmacies within easy reach. The basis for this special help is kept under constant review. Last year we helped 270 pharmacies in that way. We are hoping that this scheme, with the changes in the remuneration system which were made earlier this year, will help to safeguard the future of small pharmacies.
We have no plans for introducing powers of direction to compel a pharmacist to open up a business in a particular locality or to take over the network of pharmacies. Our desire is to support the existing network, broadly speaking on the basis of the system as it has existed since 1948 and the inception of the Health Service. We have no intention of introducing any nationalisation or public ownership in this sphere. I hope that that will satisfy my hon. Friend the Member for West Derby and the hon. Member for Wells (Mr. Boscawen).
I recognise that remuneration is the key point in this debate. Let me explain how it works. Each month pharmacists are reimbursed for the cost of drugs they have dispensed in the previous monthly period, and they receive, in addition, remuneration for the dispensing of those drugs. The remuneration consists, first, of professional fees per prescription and, second, of an on-cost which is a percentage of the cost of drugs supplied during the month. The rates of remuneration

are designed to meet the costs to the pharmacists of labour and overheads involved in dispensing and to provide a profit at present at the rate of 16 per cent. on the cost of a pharmacist's capital employed in National Health Service dispensing.
Pharmacists' costs attributable to National Health Service dispensing are ascertained by means of comprehensive inquiries every three or four years on a statistically representative sample of pharmacies which is selected by the Department and the pharmacists' representatives, and by reference to movements in the retail price index and other appropriate indices. Thus, there is a built-in defence against inflation in most cases for most of the time. The system is complex. The object of the complexity is to make sure that as far as possible the system is fair. I must tell my hon. Friend the Member for Coventry, North-East (Mr. Park) that the prescription side of the business is designed to stand on its own.
Until this year the on-cost element has been calculated at a flat rate of 10½ per cent. on the cost of drugs supplied: but the pharmaceutical services negotiating committee submitted evidence which showed that, on average, small pharmacies were not receiving enough income on that basis even to cover their operating costs, let alone make a profit, and were therefore in danger of closing in increasing numbers. The evidence also showed that the larger pharmacies received substantially more profit than the NHS scheme was designed to produce. In order to remedy this situation, my right hon. Friend in consultation with the committee, decided last December to adopt a differential system of remuneration which more closely matches the unit operating costs of the individual pharmacy. That is why hon. Members cannot talk about the remuneration of the pharmacist. We are concerned here with a whole range of remunerations which depends to a very large extent on the individual pharmacist. To help to smooth the introduction of the scheme, the Government provided £5 million from public funds.
The new system, which has been introduced by stages since the beginning of this year, will not be in full operation until next month. So the question of


remuneration is developing, but it means that a chemist who dispenses only up to 249 prescriptions will get a 26 per cent. on-cost, whereas one who distributed 5,000 prescriptions or more—and of course, that would be the larger pharmacist—would get a 9 per cent. return. The scheme will be of considerable benefit to small pharmacists, some of whom will be receiving increases in their National Health Service remuneration of about £2,000 a year.
I turn now to the profit margin. Our agreement with the pharmacists provides that on average capital employed in the National Health Service business by pharmacists on fixtures and fittings and stocks of drugs, the value of which is continuously updated to present-day price levels, the Government will pay a 16 per cent. rate of return, which in the light of current interest rates is not ungenerous. It means that for most of the time chemists have been able to go to the bank to borrow money at rates of less than 16 per cent. and employ that money to get a return of 16 per cent. That is to their advantage and it is a good thing. The 16 per cent. rate is increased in terms of absolute remuneration with the increase in value of the working capital. I admit that rapid inflation of a couple of years ago presented pharmacists, as it presented other businesses, and trades, with a cash flow problem, but apart from brief periods I think I have described the situation quite accurately.

Mr. Patrick Jenkin: Does not the Minister agree that a 21 per cent. increase in drug costs this year will create great problems?

Mr. Moyle: The right hon. Member is describing the position inaccurately, because the 21 per cent. increase in pharmacists' costs is caused not solely by an increase in drug costs. It arises from at least three different factors—the handling of a larger volume of prescriptions, the introduction of new drugs and, of course, the increase in the price of drugs. If the right hon. Gentleman bases his approach to the problem on that sort of misinformation, it is no wonder that he is misleading the House.
I turn now to the question of arbitration. We are certainly not opposed to arbitration. The Government have not ruled it out. We think that at some stage it may well be a useful piece of machinery

to resolve the dispute between ourselves and the pharmacists—

Mr. Lawrence: Then why do not the Government use it?

Mr. Moyle: I shall tell the hon. Gentleman. First, we do not know what are the precise points of dispute with the pharmacists. That has been said in the debate and it is true. My hon. Friend the Member for Gravesend (Mr. Ovenden) suggested that we should put the matter to arbitrators. I have never known of a case, in spite of what has been said this afternoon, where parties go to an arbitrator and ask him to tell them what they are arguing about. That would put the arbitrator in an impossible position. Once the parties have decided what the disagreement is, the arbitrator can propose a solution to the problem. But until that happens the arbitrator, whether an industrial arbitrator, as has been mentioned in the debate, or any other, simply cannot operate.
We put an entirely new scheme to the PSNC last December. That scheme was accepted and it is now developing. Its final stage, with its impact on small pharmacies, which are the most vulnerable, comes into operation next month. Its full impact, therefore, will not be known until some time afterwards. It may be that when we have seen how that scheme is operating we shall need to do more. It may be that at worst we shall then have a position of disagreement between the various parties to the dispute and that we can go to arbitration. But against a developing background we have put various points to the negotiating committtee on which we have not had a reply, and it is very difficult to go to arbitration at this stage.
We have put three points to the PSNC. The first is the invalid comparisons made by the PSNC with the rates of certain Government contractors covered by the review board formula. The second is the erroneous assumptions made by a well-known firm of consultants when formulating the original profit margin on behalf of the PSNC. The third is the fundamental changes which would be required in the present contractual arrangements if, as the PSNC has claimed, the rate of return on capital were to be increased so as to provide


the additional capital which the pharmacists require to maintain their stocks.
If the PSNC can reply on those points, we are half-way to arbitration. I agree that it is most difficult to make a judgment of a developing situation, and that seems to me to be an argument for not going to arbitration at the moment but for holding our horses.
It will be generally agreed in the House that the sensible thing to do—and the right hon. Member for Wanstead and Woodford quoted the remarks of Kenneth Robinson with approval—would be for the parties to a disagreement first to try to settle the matter themselves. An argument which is submitted to an arbitrator to settle is never settled as satisfactorily as the parties themselves can settle it. Those are the problems to be faced in going to arbitration.

Mr. Donald Coleman (Lord Commissioner of the Treasury): I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

SHEFFIELD GENERAL CEMETERY BILL (By Order)

As amended, considered.

Clause 6

POWER TO USE SPECIFIED LANDS

7.0 p.m.

Mr. John H. Osborn (Sheffield, Hallam): I beg to move Amendment No. 1, in page 4, line 27, at end insert—
'Provided that the cemetery shall be held as open space within the meaning of the Open Spaces Act 1906 and shall be maintained in accordance with section 10 of that Act, and that notwithstanding any powers contained in the Town and Country Planning Act 1971 and the Local Government Act 1972, the proprietors shall not appropriate the cemetery for any other purpose.'.
It might be for the convenience of the House if we were to take at the same time Amendment No. 2, in page 4, line 27, at end insert—
'Provided also that the cemetery shall not be used for any organised games or sports'.
When I spoke on the Second Reading it was my intention that the Bill should be referred to a Select Committee and I was happy at that time for that to be done and that I could accept its recommendations and should not find myself in the position I am in today of putting forward these two amendments.
If I may explain the situation to the House, the Sheffield City Council and in particular the ruling party there, the Socialist Party, have, in the view of a number of my constituents, whether they be environmentalists and living nearby or whether they are amongst those who have petitioned against the Bill—and some were supported by the parliamentary agent, a Mr. Byron Wright, aided by Mr. Fletcher and a Dr. Fletcher who gave evidence to the Select Committee—been inept in their handling of this complex issue, a view privately shared, I believe, by some Socialist councillors.
I see that the Chairman of the Select Committee, the hon. Member for Battersea, South (Mr. Perry), is in his scat. On behalf of the objectors, I should like to express my appreciation for the work that he and his Committee did for those who came to object. In this case the objectors were people who could not


afford parliamentary agents or parliamentary counsel. Therefore, they put their own case. I commended them for doing so, though I thought perhaps their presentation would have been much more able had they had the benefit of barristers and parliamentary agents, as Sheffield City Council had.
This subject was debated in the city council on Wednesday 7th June, but I found that this Bill was up for further consideration on the very next day, 8th June. That hardly allowed time for me to do anything in this House but oppose further consideration until such time as I had learnt from the City Council what had been decided on and what should happen to the Bill. When I originally objected in the House I had no idea of the view of the council and indeed I have had no official communication from the council since then, but the parliamentary agents have been very courteous and have kept me posted.
Since then I have been in touch with Conservative councillors on the city council and with a number of those who live in the neighbourhood of the cemetary, as well as with the objectors to this Bill. As one would expect, there are different points of emphasis but the Conservatives collating all the opposition considered that they had none of the assurances for which they had hoped from the city council. Therefore, I was requested to do my best to have these two amendments at least inserted in the Bill. I still believe that the objectors will try to object to the Bill in another place.
As I stated on Second Reading, I favoured the approach of the councils in the Manchester area, that of gradualness, and I wanted the Press release submitted by Sheffield City Council and the assurances given to be implemented in the Bill, namely, that at no time should this cemetery be converted into a cricket pitch, football ground, hockey ground or sports stadium. This appears to meet the requirements of those who live in the area. They want this to be a park for passive recreation, similar to the botanical gardens across the valley.
Secondly, the objectors do not want the city council to be able to build on this site without there being a further Act of Parliament for that purpose if they were

to wish to do so. This would be following the example of some of the Manchester councils. At present there is no strict Government control or national policy on how to deal with cemeteries, particularly private ones going into disuse, and I am very unhappy that the Sheffield City Council has to resort to private Bill procedure in this case.
Since the Select Committee I have had correspondence with the Secretary of State for the Environment and even with the Home Office and the Prime Minister. Obviously some councils have dealt with these matters with respect and others with not such great care. That is why we are looking at this issue again. The petition presented by the objectors was looked at by the Select Committee, and I very much appreciated the efforts of that Committee, resulting in additional insertions in the Bill. This has been of very great help, but of course, even if the memorials are removed, many graves will remain in the cemetery, either because they will never be claimed or because relatives cannot be traced as a result of poor records having been kept by the private cemetery company—there was no incentive for them to do so, since the 1960s.
Whatever happens therefore, even with these amendments, there will still be some people buried on the site though perhaps not under tombstones if the Bill goes through. That is a good reason for not having a permissive situation whereby local authorities, in this case the Sheffield local authority, could if it wished build further on the site. Time should be allowed to elapse before any development is allowed. Other local authorities, such as Manchester, took time to deal with this issue.
Under Section 30 of the Pastoral Measure 1968 Parliament requires a period of 50 years between burial and development of land and the relatives of those at present buried in the Sheffield General Cemetery need time to become accustomed to the idea that the cemetery may be completely altered, let alone be used for building or as a sports ground. As the Bill stands, I see nothing to prevent the city council clearing part of the cemetery and either building on that land or converting it into a sports ground at any time, although it has claimed this is not its intention.
The amendments I propose will restrict the use of the cemetery land to those purposes set out in the city council's Press release and put to the House by the hon. Member for Sheffield, Heeley (Mr. Hooley). If the Act of Parliament needed is passed, then the council intends first, to restore the listed buildings in the general cemetery; secondly, so far as is consistent with public safety leave certain areas of the general cemetery of great ecological interest undisturbed; thirdly, restore the western part of the general cemetery to its original form as an example of a Victorian cemetery; fourthly, landscape the eastern part of the general cemetery as a public park by removing memorials but so far as is possible leaving the actual graves undisturbed.
The hon. Member for Heeley said:
The plans of the city council for this 14 acres of strategically situated ground are as follows. The eastern part of the cemetery will be landscaped as a public park. So far as possible, graves will be left undisturbed, although memorials will have to be removed and there will have to be a considerable amount of tidying up and change of layout.
My first amendment seeks to restrict the use of the cemetery to that laid down in the Open Spaces Act 1906, Section 10. By virtue of Section 20 of that Act an open space is land on which there are no buildings or of which not more than one-twentieth part is covered with buildings and the whole of the remainder of which is laid out as a garden or is used for the purposes of recreation, or lies wasted or unoccupied. If the city council really intended to leave parts of the cemetery undisturbed for wildlife and landscape the eastern part as a public park, it should have no objection whatsoever to my amendment. If in future it is thought by all concerned that there should be some other use of the land, why not have another private Bill put forward by some other generation in 25 or 50 years? But it should not be now, when there are still people being buried there and the cemetery has not been closed.
At present, many of my constituents and the Conservative members of the city council would like such a safeguard in the Bill to ensure that the council deals with the cemetery as it has publicly stated. I should be interested to know why the council strongly objects to an amendment of this type—although

there has been a statement from the parliamentary agents stating that they do not object.
Second, to meet the needs of environmentalists and others, our object is that the cemetary should be a place of passive recreation or a park. That is the purpose of the second amendment.
On 11th April, on Second Reading, the hon. Member for Healey mentioned the period of 25 years between the last burial and any building, and said:
One of the problems that have arisen is that some people are nervous or worried that, if the cemetery is taken over, it will be used not for a park or open space and for amenity purposes but as a site on which to put up buildings. To meet this fear, the city council is quite prepared to consider an amendment in Committee to prohibit for at least 25 years any building on this piece of land".—[Official Report, 11 th April 1978; Vol. 947, c. 1256–8.]
I have discussed this with Sheffield councillors and the Socialist leader, but such an amendment does not go far enough. The mention of 25 years has upset people who would otherwise accept the Bill. There has been no amendment to the revised Bill as yet to give even this assurance, so I hope that the House will accept my amendments.

Mr. Frank Hooley: The Bill received an unopposed Second Reading, so one presumes that the House wishes it to be enacted. On Second Reading the hon. Member for Sheffield, Hallam (Mr. Osborn) said:
There was a very good Press release issued by the city council setting out its intentions clearly. These were to restore the listed buildings in the cemetery, to leave certain areas of the cemetery undisturbed for ecological reasons, to restore the western end of the cemetery to its original Victorian form and to landscape the eastern part of the cemetery as a public park by removing the memorials but as far as possible to leave the actual graves undisturbed. All Conservatives would go along with this".
Therefore, assuming that the hon. Gentleman is still a paid-up member of his party, I am surprised that he still objects to the Bill. He says that some of the objectors would go along with this too, but some would not. My understanding of those words is that there is no fundamental objection to these provisions.
Later in the debate, referring to the work of the Select Committee, the hon. Member said:
I hope that it will delete Clause 4(1) dealing with deconsecration.


The Committee has done that, so that point is met.
7.15 p.m.
The hon. Gentleman then made a substantial point:
But one matter that causes concern is what provision, if any, after the passing of the legislation will be made for those who have close relatives buried in the cemetery and who when they die wish to join those deceased relatives. I do not think that the hon. Member for Heeley understood me. The only way this will be possible is to disinter the existing graves and to let those already buried there join their deceased relatives elsewhere. The cost of doing this would not fall within any of the provisions of the Bill and presumably would have to come from persons concerned or from private sources.
That point, too, has been dealt with by the Committee.
An amendment was made to the Bill which provides that if it is intended to remove a memorial from over a grave representatives of the deceased person should have the option of having both the memorial and the grave removed to another cemetery chosen by the city council, the cost being defrayed by the council up to £50, or, if greater, the sum that it would have cost the council to do the work. This has now been incorporated in proper legal language in the Bill. So that point too has also been met.
The hon. Member also said:
I hold the view, as the promoters said in their Press release, that this cemetery should be a park and should be changed gradually."—[Official Report, 11th April 1978; Vol. 947. c. 1265–70.]
The intention is to make it a park. That is what is now proposed in the Bill as amended.
I find it a little odd that the hon. Member for Hallam is still pressing his objections, when the promoters are in accord with his general aims—he said that all Conservatives would agree with this—and have met two specific points that he wanted dealt with.

Mr. John H. Osborn: I am not objecting to the Bill. All that I am asking is that it should reflect what was put in the Press release and that is not the case.

Mr. Hooley: With respect, I would argue that it is the case.
The question whether there should be any specified time laid down about the future of this piece of land was discussed in the Select Committee. The promoters,

the city council, offered to include a clause providing an absolute limit of 25 years against any alteration. However, for reasons which I am sure my hon. Friend the Member for Battersea, South (Mr. Perry), who was Chairman of the Committee, will explain, it did not consider that that was necessary.
I am willing to defer to the wisdom of the Committee, which spent a considerable time listening to petitioners and examining the Bill. If it did not feel that this offer, which was made in good faith, was necessary, I do not see why anyone should insist on it now.
The trouble with the hon. Member's amendments is that they would mean that this piece of land would be an open space in perpetuity—for eternity.

Mr. John H. Osborn: Quite right.

Mr. Hooky: Even when discussing a cemetery, I am not persuaded that we should try to legislate for eternity. We never know what changes there may be in the social system or the needs of the people of Sheffield. Some time in eternity there might even be a Conservative council in Sheffield which might want to adopt a different policy—perhaps selling the land to a property developer. Certainly a Labour council would never want to do anything like that.
The council therefore felt that it was sufficient to make this offer of a 25-year barrier against any development and to leave the matter open beyond that.
The objection to the hon. Member's amendment is precisely that it is far too sweeping and sets out to provide for something which would carry us well into the twenty-first century, when none of us can forecast the circumstances, the needs or the demands.

Mr. John H. Osborn: The point is that we now cannot determine the feeling in 25 or 50 years. However, if it has been an open space for that time and for planning reasons it is then required that it should be built on, the future generations should pass their own Act and not put a provision in an Act today to hurt sensitive feelings of those who would he affected.

Mr. Hooley: But that is precisely the argument. The Bill as it stands is perfectly satisfactory; it contains exactly the intentions of the city council, and it has


been amended to take into account very carefully the precise sensitivities in the matter of the removal of memorials or possible disinterments that the hon. Gentleman has raised. Of course, it is possible for a future city council or a future House of Commons to enact in relation to this or any other cemetery. If, after 20, 30 or 40 years, a city council in Sheffield wants to change what is now provided in the Bill, as far as I can see constitutionally there will be nothing to prevent it.
The Bill carries out what has been clearly stated to be the purpose of the city council in its public submission, with which the hon. Gentleman says he entirely agrees and to which only a very few people have some form of objection, I understand. Indeed, I have received correspondence on the subject from only one person, who has written two letters to me.
If I understand this gentleman correctly, his objection is on some theological doctrinal point which I do not despise but which I do not understand. His case is that there is a religious provision within Christian doctrine that persons must never be disinterred. I am not theologically qualified to quarrel with that statement, but I understand that in the past the bones and remains of saints have been disinterred and removed from one place to another for reburial. If that is so, it surely constitutes sufficient precedent to provide the proper legal conditions in an enactment of this House. I accept entirely the sensitivity of those who have such objections. I understand their feelings. But surely they have been met by a specific amendment to the Bill, and I do not see any case for further amendment.
The hon. Gentleman's Amendment No. 2 reads:
Provided also that the cemetery shall not be used for any organised games or sports".
That is far too vague a concept to incorporate in the Bill. The city council has no intention of drawing football pitches or cricket pitches, or whatever it may, in the cemetery. Indeed, the nature of the ground, sloping so sharply, is such that it would be totally impossible for it to do so.
How are we supposed to interpret the term "organised games or sports"? Would the amendment prevent, for example, a teacher from taking a group of children there to play ring-a-ring-a-roses or rounders with a tennis ball and a stick? What is an organised game or sport? One cannot possibly incorporate into a Bill of this kind such a vague and generalised provision which could presumably prevent this piece of land from being used for almost every kind of recreation apart from people actually being able to sit there.
The Bill as amended meets the reasonable and fair objections and sensitivities of those who are concerned about the disturbance of memorials and graves. We have provided that, if it is necessary to remove a memorial, and possibly to remove remains, it must be done at the expense of the city council, that people must be told what is happening, and that the cost must be properly defrayed. The hon. Gentleman's amendments go way beyond what is intended in the Bill. They would determine far into the future that this land shall never be used for anything other than the existing plan, and I am not disposed to believe that we should or can legislate in such fashion.
I am sorry that, after all the hon. Gentleman said on Second Reading about the Conservatives being in favour of the objectives of the Bill—which he set out so explicitly in his speech—he is now seeking to obstruct its progress. I hope, therefore, that the House will reject the amendments.

Dr. Alan Glyn: The hon. Member for Sheffield, Heeley (Mr. Hooley) has just said that the open space is protected for 25 years. I think we all agree that such are the terms of the Bill. I think that we are also agreed that after this there is nothing to prevent anyone from building on that space. The hon. Gentleman suggests that 25 years is a sufficient period. I share the view of my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) that if it was to be built on or used for any other purpose another Bill should then be brought forward. I am confining my remarks to Amendment No. 1.
I have never been to Sheffield. I am talking on a matter of principle. All I know about Sheffield is its tremendous


reputation for master cutlers and its historic processes of plating, superseded by electro-plating and, of course, for its quality cutlery. I have no doubt that all those who in 1846 probably clubbed together to bring the cemetery into existence and the Act put on the statute book were also vastly proud of their city. However, I am not talking so much about a local matter as about a matter of principle.
As my hon. Friend said, there is no national policy for cemeteries. I have looked through many Acts of Parliament dealing with cemeteries, but one cannot find a general pattern. This cemetery is bankrupt. The company is unable to meet its commitments, and therefore the local authority has consented to take it over and to run what the orginal company was quite unable to do. Of course, if that company had been given building consent for even a small section of the land it would have been able to continue its operations.
The important point about the Bill is that it lacks a certain provision which means that building can take place after 25 years without further Act of Parliament. Under many other cemetery Acts, tombstones are able to be moved aside and the ground is used, as it should be used, as an open space for people to enjoy. Throughout the country many cemeteries have ceased to be used. But in this case there is a difference because this cemetery is still in use.
I have no objection to the city council, in its wisdom, putting down park benches, if necessary moving tombstones to the side. I can see that that would be an ideal use. I understand that the land is about 14 acres. Whatever pleasurable use it is put to, whether it is only the provision of benches for people to sit on, or whether it is some landscaping, does not much matter. The fact that it is sloping slightly does not mean that the uses to which it could be put are to some extent restricted.
I feel that this is not a local matter but a national matter. In passing in this House an Act which would permit in 25 years, without any further legislation, that cemetery to be dug up, we have to face the fact that many of the bodies there may have no tombstones; perhaps some are not even recorded and are

difficult to find. The bulldozers could go through and disrupt many graves.

Mr. Ivor Clemitson: I believe that I am the only Member of the House who has actually conducted a funeral in Sheffield General Cemetery. Only a quarter of a mile from it is the churchyard of St. Mary, Bramall Lane, and a very considerable section of that churchyard was taken some years ago for the building of a dual carriageway road, which the hon. Member for Sheffield, Hallam (Mr. Osborn) may remember. Immense care was taken in the disinterment of the 2,000 bodies which were in that piece of ground. So the fears that the hon. Member is raising seem to me, certainly in the case of Sheffield, groundless.

7.30 p.m.

Dr. Glyn: The fear is still there. The hon. Gentleman himself has admitted that bodies have had to be removed. I do not see any reason why they should be removed. I dislike the idea that after 25 years—

Mr. John H. Osborn: As far as I can gather, the council could break away from its Press release, because of some other urgent circumstances, and in a year or two start disintering the site and building on it. There is no reference in the Bill to 25 years. It has to be changed by the city council.

7.30 p.m.

Dr. Glyn: Twenty-five years is not an absolute time at all. The building could take place. I am not suggesting that the council would do it tomorrow. I do not think that that is likely at all. My case on the first amendment, putting it absolutely bluntly, is that 1 do not believe that it is right to leave the council with the power to erect a housing estate on the cemetery. If the cemetery is to cease to be used as a cemetery, it ought to be available for the quiet enjoyment of the citizens in the area, without any need to dig up the surface. There are 14 acres which I believe could be used as a memorial to those who lie underneath, and the people of Sheffield would be able to have the quiet enjoyment of that land.
That is something to be recommended, but I do not believe that it is right for us to let the Bill go through without making it quite clear that the site should


not be used for any other purpose. Certainly it should not be allowed to be used for the development of housing or offices or any other development.

Mr. Martin Flannery: I am sure that the hon. Member for Windsor and Maidenhead (Dr. Glyn) is nobly motivated and compassionate and wants the very best solution, but before enunciating principles he should have gone to Sheffield and had a look at the cemetery so that he would know what he was talking about.
When I spoke briefly on the last occasion, I said that I had looked at the cemetery from the classroom in which I taught for 11 years, and I have a wide knowledge of the area. Undoubtedly the people of Sheffield want something to be done with what has become a wilderness. Every compassionate step has been taken in drawing up the Bill. The area in question is a completely reorganised area, and it is hoped that, by means of the provisions of the Bill, it will be possible to make the site beautiful. It is the wish of the general public that this should be done.
The private company which owned the cemetery wanted matters to be put right, because only between six and 12 funerals a year were taking place and the cemetery was no longer a viable proposition. On Second Reading the hon. Member for Sheffield, Hallam (Mr. Osborn), whether he knows it or not, conveyed the impression to us in his last few sentences that he would not oppose the Bill. He seems now to have come out with new opposition to it. This is rather different from what he said previously.
In his speech this evening, the hon. Gentleman said that the council had handled this complex issue in a very inept way. There has been a Labour council in Sheffield since 1926, apart from two one-year intervals. Matters were immediately rectified after those intervals. I would not have expected for one moment that the hon. Gentleman would ever say of the Sheffield council that it had handled anything in other than an inept way. One expects that from him.

Mr. John H. Osborn: rose—

Mr. Flannery: I shall give way to the hon. Gentleman in a moment. The

reality is that the people of Sheffield are looking at this question. I am sure that there are people who are worried about it. I am sure that the hon. Gentleman is worried about it. But, no matter how compassionate the measures that we take, I do not think that they will ever satisfy the hon. Gentleman.
I have received one letter about this matter. It is from the gentleman who wrote to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley). This gentleman is deeply religious and I respect his viewpoint. His interpretation of the scriptures is such that he feels that nobody should ever be moved after burial in a cemetery. However, honourable as this gentleman is, I do not think that he mirrors the viewpoint of the majority of people in Sheffield. We should like to be able to meet him in his wishes, but I do not think we can do it.

Mr. John H. Osborn: I assure the hon. Gentleman that when he reads the Official Report he will find that I did not say that the council was inept but that I had been approached by people who said how ineptly the matter had been handled. I am not here to oppose the Bill. I have two constructive amendments which spell out in detail what should have been put in the Bill.

Mr. Flannery: If the hon. Gentleman does not get his way with the amendments, I presume that none the less he will agree with the Bill and that it will go through unopposed. He allowed it to go through unopposed on Second Reading.
This sort of situation occurs in all cities. There is a cemetery near where I live which has become grossly overgrown. The hon. Gentleman will know Rivelin cemetery quite well, I am sure. I hope that it will be set right in time in a humane and compassionate way. Indeed, members of my own family are interred in that cemetery, and I would want something compassionate to be done about it.
The hon. Gentleman comes from an old Sheffield family. My family have been in Sheffield for 150 years. In the centre of Sheffield there was an old church called St. Paul's, which had a school attached to it. In time it became a warehouse. My wife, as a girl, went to the church, St. Mary's, at which my hon.


Friend the Member for Luton, East (Mr. Clemitson) was curate. St. Paul's, in the centre of Sheffield, is now a peace garden. In that garden is the grave of Joseph Mather, a writer of doggerel poetry. His poems, some of them bawdy, were about the working people of Sheffield. I remember, when the church became a peace garden, writing an article in the Sheffield Forward in which I said that Joseph Mather would be very happy if he knew that the peace gardens lay above him.
This sort of thing has been done before, and it has been done compassionately and honourably. Every line of the Bill and all the things that the Committee has accepted in order to meet the objections of the hon. Member for Hallam have been motivated by sheer compassion. I hope, therefore, that the hon. Gentleman will allow it to go through, precisely for that reason.

Dr. Glyn: The hon. Member for Sheffield, Hillsborough (Mr. Flannery) has said, in different words, what I was trying to say earlier. I am sure that many of the people lying underneath would be delighted if the ground were to be used as a peace garden. This is exactly the sort of thing that has been done all over the country. My argument is that the council should not be allowed to divert from that and use the area as a building site. That is the crux of the matter.

Mr. Flannery: No one in Sheffield has said that the area will be used as a building site. We must have faith in the people who come after us. I hope that we shall be able to look at this area in the future knowing that the right course has been taken. We shall see the old portico preserved. We shall see an attractively grassed and beautiful area which will be used for the benefit of the local people. Those who wish to move bodies or headstones and so on will be given grants so that they may do so. There will be Bills introduced and people will be able to object. We shall do everything to help the people concerned by giving them grants and so on.
For the life of me, I cannot understand the second amendment about "organised games or sports". Organised by whom? Organised in what way? The amendment is so woolly. There is no danger what-

ever of anything of a massive character taking place.
The hon. Member for Hallam knows that St. Philip's Church is near the cemetery. He knows that people go there to sit down, have lunch and so on. Sheffield was the first clean-air city in Europe. People accept that we are attempting to beautify it. We have had long experience of this. Even if the hon. Gentleman cannot have the amendments, I hope that he will allow the people of Sheffield to have the Bill in order that the area can be beautified in a compassionate and attractive manner.

Mr. John H. Osborn: Each of the hon Gentleman's last arguments is a very good reason why he should have no objection to the two amendments.

Mr. Flannery: On the contrary. I oppose them because I think that they are totally unnecessary. The Bill caters as widely as possible. The hon. Gentleman is in grave danger of conveying to the people of Sheffield that he is being obstructionist for obstruction's sake. That is the way it will be interpreted, because everyone in Sheffield wants the Bill. I therefore hope that the hon. Gentleman will not press the amendments too hard.

Mr. Ernest G. Perry: As Chairman of the Committee which considered the Bill, I should like to say straight away that my colleagues and myself—two from either side—went into it with great care. We spent nearly two and a half days on it. We listened to the points of view and complaints of the petitioners, and also to the representatives of the Sheffield City Corporation. The Committee came to a unanimous decision in respect of the amendment which it made to the Bill.
The Committee considered at long length the question of an extension of time. It considered an embargo of 25 years or even 30 years on the council against doing anything. After careful consideration it turned down that suggestion. All members of the Committee realised the emotive aspect of the subject. When one is talking about the disposal of the dead or a change in the use of a cemetery, human relationships come into play and people want to know what will happen to the remains of their departed dear and loved ones. Many people who have


ancestors buried in the cemetery are very concerned.
Unfortunately, all big cities are faced with the problem of the nineteenth century, when private cemeteries were established but no funds were set aside for the restoration or beautifying of the site. The result is that when the site becomes full, no funds are available to keep it in a respectable state. That is a problem throughout the country. On many occasions I have been confronted with this problem.
For nearly 30 years I have been the chairman and a member of different cemetery and crematorium committees. It is a problem which is experienced throughout the country. For three years I was chaiman of the Federation of British Cremation Authorities and a vice-president of the Institution of Burial and Cremation Administrators. At all times we were faced with the problem of derelict cemeteries, and, sometimes, derelict churchyards. In most cases, those churchyards and cemeteries have been changed in a form which has been satisfactory to all concerned.
After having seen photographs of the Sheffield General Cemetery and having realised the situation, I believe that unless the local authority takes it over it will become worse than it is at present. I understand the feelings of the hon. Member for Sheffield, Hallam (Mr. Osborn)

Question accordingly negatived.

because I know that he is deeply concerned about cemeteries in Sheffield. I thank him for his valuable efforts. I also thank the petitioners for coming along and giving the Committee the information which they did. But the Committee considered the Bill in depth and made an alteration which was a concession to the petitioners. To some extent the Sheffield City Corporation did not want to accept it. However, the whole Committee was unanimous that it would insert that amendment in the Bill.

I can see no real reason why the two amendments should be accepted. The Committee considered the Bill thoroughly I would also point out that local authorities in other towns—big towns, big cities and smaller ones—have had to take this kind of action on many occasions. Other local authorities have had to take over private cemeteries because no funds were available to maintain them in a condition in which we could at least pay our respects to those who had passed on before us.

I appeal to the House to pass the Bill. Let us try to remove this eyesore of the Sheffield General Cemetery. Let us make it decent so that we can remember our dead and also so that the living can enjoy fresh air in their lungs.

Question put, That the amendment be made:—

The House divided: Ayes 13, Noes 38.

Division No. 240]
AYES
7.48 p.m.


Atkinson, David (B'mouth, East)
Lester, Jim (Beeston)
Wells, John


Body, Richard
McNair-Wilson, M. (Newbury)



Cooke, Robert (Bristol W)
Mather, Carol



Cormack, Patrick
Page, Rt Hon R. Graham (Crosby)
TELLERS FOR THE AYES:


Finsberg, Geoffrey
Stanley, John
Mr. John Osborn and


Lawrence, Ivan
Walker, Rt Hon P. (Worcester)
Dr. Alan Glyn


NOES


Barnett, Guy (Greenwich)
Golding, John
Roper, John


Bishop, Rt Hon Edward
Graham, Ted
Ross, Stephen (Isle of Wight)


Booth, Rt Hon Albert
Grlmond, Rt Hon J.
Short, Mrs Renée (Wolv NE)


Cartwright, John
Horam, John
Spriggs, Leslie


Clemitson, Ivor
Hoyle, Doug (Nelson)
Stallard, A. W.


Corbett, Robin
Hunter, Adam
Thomas, Ron (Bristol NW)


Cox, Thomas (Tooting)
Kerr, Russell
Urwin, T. W.


Davidson, Arthur
Kinnock, Neil
Walker, Harold (Doncaster)


Dewar, Donald
Lamond, James
Whitehead, Phillip


English, Michael
Madden, Max
Woof, Robert


Foot, Rt Hon Michael
Orme, Rt Hon Stanley



Fowler, Gerald (The Wrekin)
Ovenden, John
TELLERS FOR THE NOES:


Garrett, W. E. (Wallsend)
Palmer, Arthur
Mr. Frank Hooley and


Gilbert, Rt Hon Dr John
Perry, Ernest
Mr. Martin Flannery

Mr. Deputy Speaker (Mr. Oscar Murton): Does the hon. Member for Sheffield, Hallam (Mr. Osborn) desire to press his second amendment?

Mr. Osborn: No, Mr. Deputy Speaker. I shall not press it.

Mr. Ernest G. Perry: Am I to understand, then, that the Select Committee's recommendation to the House has been accepted'?

Mr. Deputy Speaker: That is correct, since the amendment was not carried.

Bill to be read the Third time.

MEMBERS' SECRETARIES AND RESEARCH ASSISTANTS

Motion made, and Question proposed,
That this House takes note of the Fourth Report from the Select Committee on House of Commons (Services), in the present Session of Parliament (House of Commons Paper No. 472), on Members' Secretaries and Research Assistants (Severance Payments &amp;c.).—[Mr. Graham.]

Mr. Deputy Speaker (Mr. Oscar Murton): I suggest that it might be for the convenience of the House to discuss with this motion the next one concerning the Members' secretarial winding-up allowance.

8.0 p.m.

Mr. Phillip Whitehead: I wish to speak on both motions in the name of the Lord President, the recommendation of the Fourth Report from the Select Committee of this Session and the proposal from the Government. I do not wish to delay the House unneccesarily. We all understand why many hon. Members need to eat and drink elsewhere tonight.
I simply remind the House that we debated the Committee's Seventh Report of last Session—the first report which came from the Sub-Committee which I had the honour to chair—on 21st February last. The House will recollect that the proposal for a lump sum for severance pay equal to three months of salary in paragraphs 21 to 24 of that report was not accepted in the Government's motion because of the complication that many secretaries would be eligible for redundancy payments under the 1965 Redundancy Payments Act.
On that occasion the House strongly took the view that this matter should be looked at again. Hon. Members on all sides urged the reconvening of the Sub-Committee so that this could be done. In the few short months since that debate, six of our colleagues have died—Marcus Lipton, Sir John Hall, Alex Wilson, John Mendelson, Frank Hatton, and Joe Harper only last week. I give this list to remind those who need the reminder of the fact of mortality in this House. I also wish to emphasise the real suddeness with which someone in the employment of an hon. Member can find himself or herself bereft of that employment in unusual circumstances.
I am grateful to my four colleagues, to the Clerk of the Services Committee and the Accountant for meeting so quickly to bring forward new proposals which have the unanimous support of the main Services Committee.
I shall outline briefly the main proposals of the Fourth Report that is before us tonight. First, we looked at the question of eligibility. It says in the report in heroic misprint in paragraph 3:
the legibility of many secretaries for payments under the Redundancy Payments Act
The secretary who was not legible would soon be eligible for redundancy payments. Of course, it is the question of eligibility that is under discussion.
The Committee accepted that many secretaries are eligible for payments under the Redundancy Payments Act. We hope that our reform will draw attention to the fact that they can make a claim upon the Member, his estate or the State, if necessary, and that others in future who leave the self-employed category will be considered for such payments.
However, there remain a number of secretaries who for one reason or another are in the self-employed category. In some cases this is because they are the wives of the Members for whom they work. Such people are not in a position to make a claim under the 1965 legislation.
We go on in the report to draw attention to a second factor. That is, that unlike most employed persons—because of the unusual circumstances of employment in this place—the secretary often receives no notice of the termination of employment. I have already referred to the deaths of Members, of which there have been so many in recent months, but there is also the fact that a Member may lose his seat. Virtually by definition a Member does not expect to do so. Almost all of us believe that we are in a permanent state of grace with the electorate and we are amazingly surprised to find that occasionally fortune does not smile upon us. There are, for a number of secretaries, unforeseen circumstances which have made us look again at the whole question of severance pay.
We came to the conclusion in the Fourth Report that the only possible permanent solution to this problem lies

in an extension of the present system for the payment of a secretarial allowance for Members. We recommended that that should be referred to the Top Salaries Review Body. The whole question of severance payment for Members' secretaries on a permanent basis must be discussed by Boyle and is not properly a matter for recommendation by a Sub-Committee of this House.
There does, however, remain—particularly as we are now in what is to all intents and purposes the last year of this Parliament—the interim problem. This could be dealt with by the setting up of a special temporary fund. Hon. Members will see, looking at the report, that we proposed that a special secretaries fund should be established, administered by Members of the House as trustees. We proposed that this fund should look at hardship cases and at the right to initiate investigations into such cases. We also proposed that it should hear claims for payments up to £500 by secretaries who could show to the satisfaction of the trustees that they had done parliamentary work after their Member ceased to be a Member, for whatever reason. Certainly in the event of sudden death, and to a lesser extent after a General Election and in other circumstances as well, a secretary can be kept here with no tenure, no expectations and no salary doing work to clear up the estate of that Member. In those circumstances, we felt it was right that a claim should be made upon the trust.
We went on to say that this temporary scheme should have an input both from the Exchequer and from Members and that Members should make monthly payments of £1 until the fund was wound up. But I understand that the meaning of the Government's motion tonight, which I personally welcome, is that it will avoid the time scale for the necessary legislation to set up such a trust ensuring contributions from every Member and will make certain that the scheme will be entirely funded by the Exchequer.
The Lord President was kind enough to write to me about this. I am grateful to him for his help in this matter and for bringing it before us so quickly. He told me that his proposal would
make provision for an allowance of up to £500 under arrangements approved by Mr. Speaker, to be paid where secretaries or


research assistants have to complete work after a Member has left the House. I have in mind that in practice the arrangements would he on very similar lines to those envisaged by the Report but with an informal panel of Members advising Mr. Speaker, rather than a formal trust.
I welcome that, and I personally welcome the fact that it removes the necessity for Members to make a contribution of £1 a month on a temporary basis with all the unhappy overtones that there would be if any one Member decided, for whatever reason, that he wished to opt out of the scheme.
I hope that the Lord President will tell us that the Government's attitude is one not merely of taking note of the report but of fully supporting the idea of referring the whole severance problem to the Review Body. We also want to know how Mr. Speaker's advisers will differ from the proposed trustees under the Committee's scheme, and whether they can investigate special hardship cases. I remind my right hon. Friend that the hardship cases we had in mind—people who were not eligible in any circumstances for redundancy payments under the 1965 Act—had a claim on the proposed trustees, just as do all secretaries, whether they are eligible under the 1965 Act or not, who might come forward and make a claim for work done. I also remind my right hon. Friend of the position of secretaries of hon. Members who have died since the debate of 21st February. They could conceivably be hardship cases in the future.
I wish to thank all members of the Services Committee who have helped to bring this matter to a speedy conclusion tonight. This begins to rectify on an ad hoc basis the very real injustice to those who serve us in this House and who have been for a very long time the unsung work force which keeps the whole business of Parliament moving. I commend the report—and, if it is incumbent upon me to do so, the Government motion as well—to the House.

8.10 p.m.

Mr. John Wells: Hon. Members in all parts of the House appreciate the compassionate interest of the hon. Member for Derby, North (Mr. Whitehead) in these matters. We may not all agree with him in detail, but we agree with him in broad principle. The only doubt I have relates to the great new

industry which has spawned in the last two years involving Members' research assistants.
The hon. Gentleman rightly spoke about secretaries, and we all have in mind the staff of our late colleague Sir Peter Kirk and of others. The hon. Gentleman spoke of secretaries winding up the estates of late Members. By sheer definition of the word "research", how can a research assistant exist the moment his Member breaks his neck'? Such a person is an absurdity when his Member has gone to Heaven.
Therefore, I deplore the inclusion of research assistants in these considerations. I also deplore the great spawning increase in that trade throughout the building, with all these assistants getting in our way in the Library on Mondays and Fridays. These people should be put in their place—which in general is in the Capitol of the United States, or in Australia, or in Paris. Very few of them are British citizens. They are a damned nuisance, and the sooner we get rid of them the better.

8.12 p.m.

Mr. Robert Cooke: My hon. Friend the Member for Maidstone (Mr. Wells) has, as ever, made a spirited speech and expressed an independence of mind that we much enjoy. Indeed, he expressed a point of view that is held by a number of hon. Members. However, I very much doubt that a new Parliament elected to cope with all the many problems of the State will share his point of view. The demand for more and more facilities for more and more people to work in this building is growing every day. Although one does one's best to ensure that sensible demands are met, there is no doubt that the demand is increasing.
That is why we welcome the chance before the end of this Session to debate the report of the Committee on the subject of new building for Parliament. The House will then be able to consider how fast and how far to go in that direction. That is a matter for another day, but I hope that it will not be many days ahead.
The Services Committee and its Sub-Committees have drawn attention for several weeks to a problem which is only partly dealt with in this debate. It is not


for want of any enthusiasm on our part that as yet we have not been able to work out a scheme to deal with all the problems. At first it seemed a simple, straightforward matter. Then, on close examination, it turned out to be most complex, and one difficulty after another was put in our way—not by those who wished to frustrate us, but by those who wished to point out the niceties of the law.
I welcome the Lord President's proposal because it provides for the payment of secretaries carrying out work of a parliamentary nature, clearing up the parliamentary affairs of a deceased Member, a defeated Member of even a retiring Member, up to a limit of £500. That is a fair amount. This will be subject to Mr. Speaker's agreement, and he will have the benefit of advice of an informal group of Members. In this respect Trustees of the existing Members Fund might turn out to be the appropriate body because it has wide experience of judging each case on its merits. Because the payment of sums of money for clearing up parliamentary affairs is not as straightforward a matter as the straight drawing of a parliamentary allowance by a Member of the House, the Lord President and those who advise him were wise to put in this procedure to ensure that the sums of money are properly applied.
There is particular difficulty in the case of a deceased Member where there is nobody with the intimate knowledge of that Member's affairs to sign a certificate or to write a letter. This proposal is to be welcomed because it solves that problem which, in so far as it relates to the services of Parliament, is the biggest problem. However,, it does not solve some other problems which we hoped our proposals would cover. I wish to draw the right hon. Gentleman's attention to two categories of difficulty which could have been dealt with had we set up a secretaries fund on a similar basis to the Members fund, with the trustees having a wide discretion to deal with particular cases.
What we are not able to deal with this evening, but what we should bear in mind for the future, are those staff who have served here for many years, who have reached a great age, and who cannot afford to retire. They may have to die in harness at an advanced age because

they were unable to enter any pension scheme, voluntary or statutory. In future we must address ourselves to the subject of a proper pension scheme..
It must be admitted that within the present financial limits of what is availble for Members to pay secretaries it is difficult to see how such a scheme could be worked out, but it may be possible in future. Those who serve for many years and who cannot afford to retire should be considered. There are not many such cases, but there are some.
I turn to the last point that I wish to put to the right hon. Gentleman. I hope that I shall not have to respond to his remarks because I am sure that he will give us a satisfactory reply. I refer to the sudden emergency that occurs, not to a Member of Parliament by being deceased, losing his seat or retiring, but some sudden domestic emergency which the secretary suffers or some other emergency related to the parliamentary activity. In the present arrangements we have no discretion to deal with such cases. We have discretion in the case of the Members Fund if an accident happens to a Member of if the Member dies, but similar discretion is not possible in respect of the limited scheme we are now discussing.
I hope that the Lord President will bear these matters in mind and will give us some hope that we may return to them in the future. We look forward to hearing his reply.

8.16 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The hon. Member for Bristol, West (Mr. Cooke) sought, in his usual skilful style, to raise an entirely different matter. He mentioned a possible future debate in the House on the report on parliamentary building. That is an extremely important matter, and I fully accept that it would be most deplorable if it were never discussed in the House.
When we discussed the matter in the Services Committee, I understand that I gave an absolute undertaking to the Committee that there would be such a debate. If the hon. Gentleman says that is the truth, I am sure that is so. Therefore, we must seek to have such a debate. I should like to have had that debate in any case, but we all know that there


is great pressure on parliamentary time. I fully accept what the hon. Gentleman said about the great desirability of such a debate. Therefore, in view of my undertaking and the nature of the subject, we must do everything possible to have such a debate before we adjourn for the Summer Recess.
I shall not be tempted to follow the disrespectful remarks of the hon. Member for Maidstone (Mr. Wells) about research assistants. They, as others, have a right to live. I shall not make any adverse comments about them. I have enough enemies in this life without wishing to range research assistants against me. Therefore, the hon. Gentleman must fight that battle by himself. I have nothing against research assistants and I think that they should be properly treated, too.

Mr. Wells: rose—

Mr. Foot: I cannot give way to the hon. Gentleman. This is not a debate about research assistants. It was the hon. Gentleman who introduced that aspect.
The whole House owes a great debt of gratitude to my hon. Friend the Member for Derby, North (Mr. Whitehead) for his speech in this debate and the clear way in which he stated the position, and also for the immense work he has undertaken. I wish to express by personal gratitude to my hon. Friend, and I am sure that I am expressing the view of the secretaries, Members of Parliament and indeed the whole House.
What should certainly happen in the establishment of a committee to advise Mr. Speaker is that my hon. Friend should be there to give him some advice. Nobody would be better qualified than my hon. Friend to do so. In response to that aspect of the matter, I think the wisest course would be that the Sub-Committee of the Services Committee, which has played such an important part, should be the body to advise Mr. Speaker. It does not rest with me who will be the Opposition's representatives on that Committee. That would be the intelligent way to proceed, and I believe that it would command the support of the House and of those who have followed this matter throughout.
We on the Services Committee, led by my hon. Friend the Member for Derby, North and others, have pursued the ques-

tion of payments to Members' secretaries and research assistants, about which there is concern in the House, with all due speed and vigour. When we debated the Seventh Report of the last Session in February this year, there were serious reservations in the Government's response, but we have overcome those reservations and wholeheartedly respond to the latest report.
In our latest report, the Committee notes that even where an employer is unable to meet his obligations under the Redundancy Payments Act, an employee should not suffer since full payment may be made from public funds. I should like to draw the House's attention to this fact and to echo the report's hope that this knowledge will mean that even more secretaries will claim their statutory entitlements. Nevertheless, I accept that this does not meet all the problems that secretaries can face, and the report therefore goes on quite correctly to look at the cases where a secretary or research assistant may be faced with the task of completing parliamentary work that has begun when a Member has left the House, for whatever purpose. It is important that work done should be paid for. As is emphasised in the report, that is the object of the scheme before us.
However, on examining the report more closely, we found that in one respect there was a certain reservation. I was advised that the establishment of a fund such as that proposed in the report would require primary legislation. Indeed the Members Fund, with which analogy is sometimes drawn, is statutorily based. I wholeheartedly support the report's view that the question would best be examined by the Top Salaries Review Body. I shall propose that to the Prime Minister, who is responsible for making such recommendations. If he does not agree, I shall have some severe words to address to him. I assure my hon. Friend the Member for Derby, North that we shall back that recommendation and ask the Review Body to look at the matter.
However, the implication of this must be that we are discussing the establishment of a temporary scheme only and I am sure that the House will agree that, for this reason alone, primary legislation would he inappropriate and would delay matters further. One of the purposes of this debate and one of the requirements


of the House in our last debate was that we should not delay matters. My hon. Friend the Member for Derby, North has given further tragic evidence of why we must not delay.
I shall ensure that the Committee considers whether we can look at retrospective cases. I cannot give an absolute promise, but I certainly think that we should consider retrospective cases, at least back to the first meeting. In any case, it is necessary that we should have gone ahead to get the motion through without waiting for more general legislation or a report from the review body.
The motion fully accepts the spirit of the report and endeavours to give substance to it in a more direct way. Payment will be made solely by reference to the resolution, as is the case with Members' severance pay. One result is that the whole cost of the scheme will be met from public funds. That is the only way that we could have dealt with the matter expeditiously. It is acceptable to the Government on the understanding that the scheme is temporary pending a report from the Review Body, that the cost of the scheme should be met, as far as possible, from within the existing Vote provision and that the £500 will be paid only for work done. That is also in accord with the Committee's recommendation.
The scheme will be administered by the House's Accountant under arrangements approved by Mr. Speaker. It is contemplated that there should be a source of advice from hon. Members available to the Accountant and the most appropriate way of achieving that would be for the Sub-Committee of the Services Committee to be enabled to advise Mr. Speaker on this subject.
I know that I have not covered every aspect. I am not sure that all the cases raised by the hon. Member for Bristol, West would have been dealt with by a more formal fund or by a body entirely analogous to the Members Fund, but I agree that we must see how we can also deal with those matters. I hope that such an approach will help the House.
I hope that the motion will be passed and that the House will accept that the Services Committee has responded to the debate that we had a few months ago and that we are making one more con-

tribution to trying to ensure that secretaries and research assistants who work for hon. Members are decently and properly treated. That has not been the case in the past. I believe that we are taking a good stride in that direction, and I hope that the House will approve the motion.

8.26 p.m.

Mr. Whitehead: Wtih the leave of the House, I should like to comment on the Lord President's very helpful summary of the Government's attitude. The whole Committee is grateful that the Government have not merely found it possible to take up the Sub-Committee's recommendations, but, in one important respect, to extend them.
Two points have arisen from the debate. There was a sustained onslaught on research assistants by the hon. Member for Maidstone (Mr. Wells), who is not here for the conclusion of the debate. It seemed to me that the hon. Gentleman was saying that all research assistants were transatlantic nuisances who hung around the Library and cluttered up this place and that they should not be considered in the terms of reference of the Committee's report or the Government's proposals. I must make clear that the Committee was required throughout to look at the position of research assistants, as well as the position of secretaries, precisely because we anticipated, as does the House as a whole, that the future employment of research assistants, who are making a genuine contribution to the legislative process here, will be extended. It is foolish to suggest that these people are a drag upon our proceedings or are treating their work as an extended overseas seminar from some Middle West high school in the United States.
It is clear that the Committee advising Mr. Speaker will take a different view of a claim by a research assistant for having wound up the correspondence of a Member as against the claim of a Member's secretary. By definition, a dead or retired Member is unlikely to be commissioning research. It is possible that those who have retired to the House of Lords—which is another form of death—may be seeking further information from their research assistants on conditions in that place, but I do not think that that would constitute a legitimate claim on the fund.
In his absence, I ask the hon. Member for Maidstone to take research assistants seriously and to accept that the members of the Sub-Committee who become advisers to Mr. Speaker will be able to make the appropriate differentiation in this respect.
I imagine that on most occasions Mr. Speaker and his Committee will not be called into action. These and many other allowances are paid at the discretion of the officials of the House, especially the Accountant, to whom I pay tribute. The officials are perfectly capable of distinguishing a "phoney" application from a genuine one for this allowance as for most of the other allowances that are paid in the House.
I again thank my right hon. Friend. I commend the Report to the House.

8.30 p.m.

Mr. Robert Cooke: I am sorry that my hon. Friend the Member for Maidstone (Mr. Wells) was not present in the Chamber to take his medicine from the hon. Member for Dereby, North (Mr. Whitehead). My hon. Friend is a no nonsense sort of Member. There is an element of truth in what he said, but only an element. We have had some pressures this summer from a large number of overseas research asistants, who are possibly benefiting in a somewhat seminar capacity. I shall not pursue that argument. I accept absolutely that there is a growing demand for such assistants as there is for somewhere to put them.
I thank the Lord President for his most generous response to the possibility of a debate on the Fifth Report. I hope that the debate on that occasion will be as agreeable as the present debate.
The right hon. Gentleman suggested that the Sub-Committee of the Services Committee, headed by the hon. Member for Derby, North, might be the appropriate body to advise Mr. Speaker. It might be better if Mr. Speaker were allowed to choose those who should advise him, bearing in mind, of course, what has been said by various important people. It may be that Mr. Speaker will want to draw on other resources to complement the humble Sub-Committee of the Services Committee. I hope that the right hon. Gentleman will bear that in mind.

Question put and agreed to.

Resolved,
That this House takes note of the Fourth Report from the Select Committee on House of Commons (Services), in the present Session of Parliament (House of Commons Paper No. 472), on Members' Secretaries and Research Assistants (Severance Payments &amp;c.).

MEMBERS' SECRETARIAL WINDING-UP ALLOWANCE

Resolved,
That, in the opinion of this House, provision should be made under arrangements approved by Mr. Speaker for an allowance not exceeding £500 to be paid to, or to the personal representatives of, a person who has ceased to be a Member of this House towards defraying the expenses of secretarial or research assistance which is required in connection with that person's Parliamentary duties but is so required after he has ceased to be a Member of this House.—[Mr. Foot.]

ROADS (SOUTH-EAST ENGLAND)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stallard.]

8.31 p.m.

Mr. Tim Ralhbone: I am pleased to have the opportunity of raising in the House a subject that concerns a major capital asset that the country, especially Sussex and the South-East, has inherited over the centuries, namely, our local road network.
In Sussex and the South-East almost 98 per cent. of the roads are county roads. That may be the highest proportion anywhere in the country. Therefore, it is peculiar that perhaps the South-East region's share of total national expenditure on road construction and maintenance has remained the same over the past 10 years. If it had remained the same at a sufficiently high level, that would not be surprising, but unfortunately the equality of application of Government funds hides worrying anomalies.
First, the national budget for all road construction has been halved since 1973. That is of especial concern in Sussex and the South-East. Secondly, the proportion spent on county road construction has decreased overall. From 1967 to 1977 it has almost halved, moving from 13½ per cent. of the total to 7½ per cent. Thirdly, and perhaps in today's circumstances most worrying of all, the Government's


policy seems to be to force down local authority spending on road maintenance. That was brought home in a quotation in the current issue of Drive for July and August, which reports:
A DoT spokesman said 'At the moment policy on road maintenance is to cut it. I know that we have come in for a lot of criticism from people who are saying not enough is being spent, and we accept that there are genuine fears that standards might fall below what is thought adequate. But the Government thinks that there is scope for saving money on things that are really cosmetic treatment for roads and highways'".
That is an extremely worrying statement of policy. I very much hope that when the Minister replies he will refute it.
The picture is made even bleaker because, whereas in the past local authority expenditure used to be applied primarily for the provision and maintenance of the road network. Nowadays only about half of that expenditure will be so applied, because the remainder has to go, on the one hand, towards subsidies to local transport, which have increased by almost six times since they started at the beginning of 1970, and, on the other hand, to burgeoning administrative costs which are now running at the horrific level of 20 per cent. of the total budget—twice the proportion of only five years ago. This, as any county councillor, county engineer or county surveyor appreciates, is due almost entirely to greatly increased administrative demands from national Government.
All this is taking place at a time when, over the past 10 years, road traffic has grown by 45 per cent., the gross weight of vehicles has increased by 33 per cent., owners' expenditure on vehicles has increased by an enormous 248 per cent. and the Government are, I believe quite rightly, encouraging further increases in mobility for everyone.
The picture is even worse for county roads in the South-East. Because car ownership in the South-East is above the national average at 78 per 100 households compared with the national average of 72, and because truck mileage grows faster as trade with Europe increases, county roads carry more of this burden because of the paucity of motorways in East and West Sussex and in Kent and the lack of many fully developed trunk roads as well. Lastly—a point which

applies to the nation as a whole but applies equally to the South East—the volume and weight of traffic everywhere has increased far faster than anyone ever anticipated.
County councils responsible for their own local road networks cannot be blamed for what is a sadly deteriorating situation. Since the advent of the transport policies and programmes system, the East Sussex County Council, in common with other councils in the area, has become increasingly aware of its inability to build the roads which are needed because of too little Government funding and too much Government administrative demand. Therefore, it has had to submit bids for road building in accordance with Government guidelines, and that has meant not putting forward for approval the road bids that it knows are needed. Unless resources are substantially increased, nearly half of the presently uncommitted, but desired, road schemes in East Sussex will still not be completed by 1991.
But that is not all. Not only are insufficient new roads being built, but existing roads are no longer being properly maintained. Until recently the standards of roads in the South-East were as high as anywhere in the country and, therefore, among the best in the world. The results of some years of imposed neglect are now becoming noticeable. If not yet at a critical stage of deterioration, it is certainly very serious. If cuts in road maintenance are not restored over the next five years, by 1983 it is estimated that we shall have reached the point of no return and it will become financially impossible ever to catch up with the backlog of road repair work.
Just as more and more motorways are now requiring major surgical repairs, often including rebuilding of the new substructure down to 18 in. or more, so county roads, few of which were designed and built for today's weight of traffic, require quite drastic attention. Yet that is just what they are not getting.
The AA estimates that overall in Britain there are now 250,000 potholes or similar faults in our road system. It is likely that East Sussex has more than its fair share of potholes because, on an index drawing together total road mileage, or kilometreage, in the county, on the one


hand, the population using those roads, on the other hand, and the expenditure on those roads, on the third hand, East Sussex has not been able to do better than to come at the bottom of the index for similar counties and at near bottom for all non-metropolitan counties in the country.
What does all this mean? First, it means that the costs to motorists and commercial vehicle operators have been soaring because of higher running costs through damage to suspensions, premature tyre replacement and increased low-gear fuel consumption. Then there are costs to the community, which are escalating because of increasing numbers of accidents. It is interesting and worrying to note that accidents caused by skidding due to poor road surfaces have increased by one-third since 1974, and this is marked, in part at least, by increasing public liability claims, which have increased both in number and in amount every recent year.
These, presumably, are some of the reasons why the Department of Transport is carrying out an extensive survey into the state of roads and road surfaces. I wonder whether the Minister is yet ready to tell us anything about the results of that investigation and to indicate any action he is contemplating in the light of those results, and particularly, of course, any increased spending plans that he may have in mind for East Sussex and the South-East.
In the absence of greater Government funding and greater Government initiative, who is suffering? First, business and commerce are suffering. I give the town and port of Newhaven as an example. Here is a port which is burgeoning and is more prosperous than it has ever been in living memory because of the increased trade with Europe and the rest of the world. In addition to the trade through the port, Newhaven has its own base of light industry, much of it export-directed.
Newhaven is well linked by British Rail to all parts of Britain, but it is ill served by its road links. Improvements have been made internally. I think that the Minister inspected them quite recently. But still Newhaven has only a B road as its main north-south feed, and this road is soon to carry added burdens of trucks going to and from a new county refuse

disposal tip. These are heavy trucks, travelling at 25 to 30 m.p.h., at an expected rate of 2,000 movements per week. So the business of the community and commerce within the community suffer.
But people in the community suffer too, and, whatever Mr. Bernard Levin may say about the Lewes bypass, as he wrote about it in The Times last Wednesday, the relief that that has given—and it will give even more once South Street relief scheme has come on stream properly—is just the sort of relief which is so much desired by other towns, such as Winchelsea, Rye or Robertsbridge.
In Kent it is interesting and worrying to note that Kent County Council's original development plan, produced 20 years ago, included 44 bypasses of small towns and villages, but as of this year only six have been built.
But communities suffer economically as well as environmentally. Newhaven is a major prosperity centre for the Lewes District Council, for the East Sussex County Council and for the South-East as far as future planning is concerned. But in the 1978 revision of the East Sussex County Council's county structure plan, which has been approved by the Secretary of State, the development of the port of Newhaven is specifically inhibited because of the weak road links to and from the town. This means that much-needed jobs cannot be created there. The same can be said for other towns in the South-East. Hastings, just down the coast, is a very good example of where quite modest road building and improvement programmes can help to attract trade and light industry and thereby create, naturally, improved employment opportunities.
But not only do those in the specific community suffer. The ratepayers and the taxpayers of the whole area suffer, because as remedial repairs are cut back and improvements are postponed this inevitably leads to more drastic remedial surgery and more expensive improvements in the future.
I cite for the House two worryingly dramatic statistics. Road resurfacing, to seal out moisture and to restore anti-skid properties, costs approximately 50p per square metre. But if that is not done and damp seeps in so that roads begin to


crack and to craze, rebuilding of those roads can cost up to £15 per square metre—30 times the cost.
The final group of people who suffer are those who use the roads, whether they are commercial vehicle operators who have to allow for more off-the-road time and increased cost of repairs, or private individuals who, in the South-East, are often retired—as they are in my constituency of Seaford, Peacehaven, Telscombe Cliffs or East Saltdean on the South Coast. They have enough difficulty already making ends meet without additional car repair charges.
The Minister would do well to bear in mind that even the Prime Minister has to suffer because the road leading from Lewes to his country estate nearby is like a switchback due to the lack of running repairs because of cuts in the road repair funds.
For a county such as East Sussex this financial circumscription on road building and repairs is particularly frustrating. The county of East Sussex has already taken special pride in its road system. East Sussex pioneered the building of concrete roads 45 years ago. More recently, East Sussex pioneered road edge lining which has reduced accidents dramatically by up to 22 per cent. Sadly, such pioneering work cannot be undertaken now when even basic repair work has to be left undone.
What can the Government do? I ask the Minister to address himself to seven specific issues. First and foremost, will the Minister consider the reversal of the Government's stated policy of cutting road maintenance? The policy is too shortsighted. It stems from a complete lack of understanding of the long-term, expensive ramifications.
Secondly, will the Minister consider the allocation of more funds for county road building and improvements to allow county councils to tackle properly such much-needed works as on the B2109 which leads north from Newhaven? I should welcome a re-commitment from the Government in order to improve the roads of the South-East.
Thirdly, will the Minister consider a reassessment of the provisions in the Transport Bill on local transport subsidies? Even if 70 per cent. of bus subsi-

dies are funded by the Government, an increase in total subsidy of £500,000 in a county area means that £150,000 has to be found from the rates. It is difficult to see from where such funds would come except from highway maintenance budgets or increased rates. Both are unattractive and unacceptable sources. This raises whether funds should be taken from safeguarding a capital asset and used for renewed expenditures of a social nature.
Fourthly, will the Minister investigate whether lorries, particularly top-weight lorries, are paying their way properly to ensure that the relative level of their road taxes is proportionate to their share of road costs? I was interested to read in The Sunday Times recently that it is estimated that the heaviest lorries might be underpaying their share by £40 million a year.
Fifthly, can the Minister argue more effectively than previous Ministers with Treasury colleagues that road users should pay a fairer share of motoring-related taxes, particularly the £915 million that they pay in vehicle licence dues and the lesser amount, but still considerable, of £25 million in VAT on fuel? That figure was quoted in the issue of Drive magazine to which I have referred.
Sixthly, will the Minister examine the need for annual TPPs? What is the real effect of these annual documents, if any, on the condition of county roads or on the lives of those who live alongside those roads or use them daily? Could not TPPs be submitted every three or four years and thereby reduce administrative costs and improve budget planning?
Finally, in pursuit of the Secretary of State's intention to devolve more responsibility for local transportation to county councils, cannot central controls be relaxed and unnecessary administrative requirements, often duplicated at local and national levels, be reduced? Is it necessary for the Government to tell the East Sussex County Council in detail how it should mow its grass verges?
The Secretary of State said, in talking to the County Surveyors Society on 19th January last, that he saw his job as
to ensure that the right roads are built to the right standards in the right place at the right time".
To that I add only "and that all roads are maintained to correct standards at


all time." There is nowhere in Britain more deserving of the attention of the Secretary of State and the Under-Secretary than Sussex and the South-East.

8.51 p.m.

Mr. Geoffrey Johnson Smith: I am grateful to my hon. Friend the Member for Lewes (Mr. Rathbone) for raising this matter on the Adjournment because it attracts a great deal of interest both in Sussex and throughout the South-East. Although the South-East may from time to time be regarded by citizens of other regions as part of Europe's golden triangle with a high standard of living, in terms of roads it is living in the Third world.
In spite of the growing volume of trade between London and the industrial heartland of Britain, there is not in the South-East one motorway which links that industrial heartland with the growing trade ports linking England and the South-East with the Continent. There is no hope of such a prospect for many years. It is a scandalous story of neglect which goes back many years. I make no complaint against the Minister, whom we are glad to see here, or any other Minister or Government. All kinds of people bear responsibility from far back in the past, but we have to do something about the problem now.
I therefore draw to the Minister's attention one or two facts and figures which will supplement and underline what my hon. Friend the Member for Lewes said. I am not seeking to get the Minister to call upon the Chancellor of the Exchequer tomorrow to ask for larger Government expenditure. I understand the need for prudent restraint, but I am asking for a definite shift in resources.
Let me deal with trunk road expenditure. There is not much trunk road in Sussex or, for that matter, in the South-East. Between 1968–69 and 1975–76 the average expenditure per kilometre on trunk roads in East Sussex—that is, trunk road improvements—at 1975–76 prices was 96 per cent. of the English average. We were not therefore far short of the average, hut, as I have said, there are not many trunk roads in the area.
Let us now consider, however, expenditure per thousand of the population. This is a growing area. Expressing that

expenditure in the same terms, it was 59 per cent. of the English average. When we turn to expenditure on the principal county roads, to which my hon. Friend referred, the situation is most serious. Expenditure per kilometre, expressed as an eight year average at 1975–76 prices, was 52 per cent. of the English average, and expenditure per thousand of the population was 60 per cent. of the English average.
The Minister is a fair-minded man. We have often heard him speak on these matters. I am sure he would be the first to admit that Sussex comes out of this statistical comparison very badly. When we compare what has happened in Sussex with the huge growth of expenditure that has taken place in the North, the situation is shown up as tragic and demonstrably unfair.
We face, as the Minister will know from his colleagues on the Front Bench, a huge expansion at Gatwick. We face a growth in cross-Channel trade and a growth in the population of Sussex and the South-East as a whole. Quite clearly there is an urgent need for a change in Government priorities which will shift resources to Sussex and ensure that we have a fairer share in the future.

8.55 p.m.

The Under-Secretary of State for Transport (Mr. John Horam): I am grateful to the hon. Member for Lewes (Mr. Rathbone) for raising this subject because it is, as all hon. Members will agree, an under-debated subject in the House of Commons. I am delighted that the hon. Member found time to discuss it rather earlier than most Adjournment motions.
First, in reply to the hon. Member's remarks and those of the hon. Member for East Grinstead (Mr. Johnson Smith), who intervened briefly, I take the point that in the past the whole of the South-East, including Sussex certainly, has had less than a fair share of the national cake of road expenditure. I do not think anyone would deny that. What is, happening, however, is that the balance is now being changed and the number of motorway and trunk road projects, let alone county projects, under way in the South-East, including in Sussex and Kent, for example, the links between London and the coast, is really very considerable.
My first point is on the question of road maintenance, because the hon. Gentleman quoted at some length from an article in the magazine Drive which came out very recently. I regret that article because it was full of inadequacies and distortions, and I am really surprised that a magazine which is run by the Automobile 'Association should indulge in such scaremongering on the subject of road maintenance. I welcome an article on this very important and worthwhile subject. but those responsible should have taken the trouble to be more accurate in their presentation of the situation.
It was said, for example, that expenditure had decreased by as much as one-third over the period from 1973–74 until today. That is really gross exaggeration. Probably it has come down by no more than one-eighth over the period, so that that is a distortion by a factor of more than two. I hope that if in future Drive writes on the subject it will get its facts more accurate. It has to be said, however, that expenditure on road maintenance has been cut there is no denying that. Public expenditure has been constrained and, as we know, Conservative Members have urged the Government to go much further than they have gone in restraining public expenditure. But it is a question of balance.
What has now happened is that, after certainly a period of three or four years of successive cuts in road maintenance expenditure, it has now bottomed out and is stable. Looking at local roads, it is now stabilised and will continue at roughly the present level, which is really very high. We are talking of something of the order of £470 million in White Paper figures, a very considerable sum. Not only that, but maintenance of motorways and trunk roads, which take 28 per cent. of our traffic, is now increasing and will be over £80 million next year and going towards £90 million by the end of the decade. Thus it is actually increasing. The situation is therefore very much better than either Drive or the hon. Member for Lewes has said.

Mr. Rathbone: I should like to be precisely reassured on this, because Drive may have been off the rails in some of the points it quoted but it gave a direct quotation of a spokesman from the hon.

Gentleman's Department saying that it was Government policy to reduce road maintenance funding. I hope that by what he has said the Minister has refuted that and turned it on its head.

Mr. Horam: Yes, I have, The situation is that in the White Paper on transport policy produced last year we said that there would be a further small cut in maintenance expenditure. That has now taken place. We have reached the bottom of the slope down and we have stabilised at roughly the figures now being spent. We do not intend to take the process any further, so that there will not be any further cuts in road maintenance. As I said, on trunk roads, and particularly on motorways, maintenance expenditure is increasing.
The hon. Member for Lewes referred to the number of repairs on motorways. One thing which strikes people on motorways these days is that an increasing number of repairs are being done. The amount of repair work has to increase because many motorways were built in the early 1960s and the surface has now reached the end of its design life.
Second, while, for general economic reasons, undertaking that restraint on maintenance expenditure, simultaneously the Government embarked on a series of road maintenance surveys, as the hon. Gentleman mentioned—I cannot recall whether Drive mentioned it—which started in 1976. We have now reached our third annual survey. The first two were to establish a base level of information against which we will judge the trend over the years. I cannot yet give a detailed analysis of the position, but our general evidence is that there is deterioration in the quality of our roads.
We shall have these further comprehensive checks—they take place at no fewer than 6,000 different places in the road system—to make sure that we do not go below a level which would adversely affect safety on roads and their general condition. So the matter is being looked at scientifically and rationally.

Mr. Rathbone: I mentioned that it had been estimated that, if road maintenance funding were not dramatically increased —not just stabilised—in 1983, it would become financially impossible ever to stabilise the quality of the roads. From what the Minister says about future


budgeting and about the tentative results of this survey. I gather that he is denying that. Could he elaborate to reassure me?

Mr. Horam: The quotation to which the hon. Gentleman referred—he so-called backlog which could not be made up—came, I think, from the Asphalt and Coated Macadam Association. That is an interesting source, because that body clearly has a vested interest in road surfaces. But it is wrong. We have no evidence that such an unsupported assertion is correct. All our evidence suggests that we have got the level of spending about right. Certainly we should check our general view, as we are doing with this comprehensive survey which we do every year, but we have no reason to believe that we are wrong. The important thing is to take an objective view and not to rely on the assertions of vested interests.

Mr. Rathbone: Including the Government.

Mr. Horam: Certainly.
I now come to the more local matters of Sussex in particular and the local transport planning in that area. Since April 1975, county councils have had full responsibility for local roads as part of their comprehensive responsibility for local transport matters. The Department's involvement has been through the medium of the transport supplementary grant procedures and the annual statement which the councils submit to the Secretary of State on their local transport policies and programmes—the TPPs.
It is important to remember that the county's local transport needs are considered as an interrelated whole. It is up to the county to decide within the framework of central Government policies and available resources where the need for particular new local roads lies in relation to the various other transport priorities, such as bus revenue support, maintenance expenditure and so on. This is an area where the operation of local choice is very important, because local authorities know the needs of their areas.
Turning to East Sussex in particular, and keeping in mind that distinction between the role of my Department and the local responsibility of the council, perhaps we could consider the last TSG

settlement, for 1978–79, for East Sussex. under which we are now working.
In its TPP bid for this year which it submitted to my Department last summer, East Sussex decided that the highest priority major new local transport scheme was a new road—as opposed to any other item of expenditure—and that the highest priority was the second part of the Hastings spine road. When my right hon. Friend the Secretary of State reviewed the East Sussex TPP in the light of the total call on the resources available and the proposals before him, he found that he was able to accept an overall level of local transport expenditure sufficient to permit the county to make a start on this new road. The county was told of this in the regional director's letter of 15th December 1977.
In the South-East as a whole, again within the overall resource constraint, my right hon. Friend was able to accept sufficiently high expenditure levels to permit several other first priority schemes. In fact, as far as each county's first priority road schemes were concerned, virtually everything bid for in the South-East was accommodated.
In East Sussex there was the Hastings spine road, which I have already mentioned. In West Sussex the by pass of Bramber and Steyning will be able to start in 1978–79, the current financial year, as planned. In Hampshire, although for administrative reasons the first-choice scheme, which was the Easton Lane link at Winchester, was not allowed for, both the second and third priority schemes, Odiham bypass and the Hulbert Road link to the M3 at Waterlooville, were included. Kent did not include a major new road scheme in its bid for 1978–79. Nor, after proposals for a junction on the M25 were deferred, did Surrey.
In all, about £20 million is being spent by counties in the South-East in this current financial year on their own choices of local transport schemes. This figure includes both small schemes and large schemes and both new schemes and schemes already started. But all are capital works, over and above the ordinary recurrent expenditure—on maintenance or bus subsidies, for instance. So quite a lot is going on on local roads —we are not talking about motorways or trunk roads—in the South-East in the


current financial year with the help of financial support from my Department.

Mr. Rathbone: I am sure the hon. Gentleman appreciates that, as I pointed out earlier, one of the reasons why he can claim that a lot is going on and why his Department has granted the counties what they wanted to have is that the counties have been circumscribed in putting forward their plans for each year because they knew of the budgetary limitations and the way that the TPPs would be inspected. It was the very fact of the TPP which inhibited them from putting forward plans which they would otherwise have put forward and which has meant that over the years a huge backlog of desired but unrequested roads has built up.

Mr. Horam: I do not think that the hon. Gentleman can have it both ways. Over the last three or four years we have been in a period of general expenditure restraint. I shall have something to say about the future later in my remarks. But one has to accept that general economic restraint of the last three or four years. I think that the county councils accept it.
I turn now to the future. Obviously I cannot prejudge my right hon. Friend's decision on TSG settlements yet to come, but it is worth mentioning the sort of scheme that we know counties in the South-East have in mind. Let us look first at East Sussex. Its proposals in last year's TPP for future years included, among others, an improvement of the access to Shoreham Docks and the bypass of Uckfield.
As the hon. Member will know, the routes to the country's docks are a matter of great concern to the Government—he mentioned Newhaven as well as Shoreham—and should this Shoreham Docks proposal be carried forward in the bid for next year we will look at it very carefully and sympathetically. The bypass of Uckfield is also likely to remain high in East Sussex's order of priority, relieving as it should, the small town centre of the considerable through traffic on the A22.
I turn now to the longer-term needs of the South-East as a whole. Much work is being done. I would mention in particular the strategic review of roads in the region which is in hand under the

auspices of the Standing Conference on London and South-East Regional Planning. My officers are in contact with the conference officials, and I understand that they expect to meet again in the next few days at working level.

Mr. Rathbone: When might that group report?

Mr. Horam: I cannot say offhand. It is having a meeting in the next few days. That may well be part of a series of meetings which may not necessarily lead to a final report. If it does, I will inform the hon. Gentleman well in advance. These figures and particular schemes do not give the whole picture.
The hon. Gentleman also asked whether we would reconsider our view about the relationship between national schemes and local schemes. I think that he was asking for more support for local schemes. I can tell him that my right hon. Friend has said that he is willing to look again at the amount of resources which the Government are making available for their own programmes for motorways and trunk roads, as opposed to the county schemes for local roads. We feel that that relationship—given that we have had a long period of motorway and trunk road building—can with benefit be looked at again. Obviously, the hope of the counties will be that we can make more resources available to them. I cannot commit myself at this stage, but we are prepared to examine that to see whether we can change the relationship.
As the hon. Gentleman knows, we have also opened recently the Lewes bypass. Indeed, I opened it myself. There are also further improvements in prospect there. The South Street link has been started. There are improvements near Brighton. In particular, major improvements are being carried out at Falmer. Elsewhere in East Sussex, there is much trunk road work planned for the near future. The programme centres generally on improvements to the coastal road, the A27 and A259, with the £11 million Brighton bypass as a major scheme in the early 1980s, and improvements to the newly-trunked A21. There is also a sizeable bypass of Robertsbridge and Hurst Green to come.
Several of these trunk road schemes, particularly those at Lewes and the


Brighton bypass, will have a major effect on access to Newhaven Docks, to which the hon. Gentleman referred in his speech. The county's own Newhaven ring road, which has recently been completed, has already considerably improved the access to the docks.
Elsewhere in the South-East, the overall road system is dominated by London. Many of the radial routes are trunk roads and many have been considerably improved in recent years. The A20, for example, and the A2 have been improved. Much further work remains in the pipeline. Both hon. Gentleman will know that the highest priority of all in the Government's road programme is the orbital motorway, M25, around London. This will do much to improve communications for Londoners and for people who live in Sussex and in Kent.
Finally, I want to touch on one or two other matters raised by the hon. Member for Lewes. He asked me seven specific questions at the end of his remarks. I think that I have dealt with maintenance, the subject of his first question.
The second question was concerned with the relationship between national schemes and local roads. The hon. Member asked me, further, to reconsider our approach to local transport subsidies. In general, he seems to be in favour of more support for capital schemes as opposed to revenue schemes, such as bus support, for example. I think this is a matter of balance, frankly, and that there is a party political difference between us here. The Government are concerned that there should be proper support for bus services, otherwise we are losing too many of these services throughout the country. Bus services are being cut back and fares increased very rapidly. The Government want to stabilise the position. There may be a party political difference between us on this. It is a matter of judgment between Government and Opposition and a matter of judgment for local authorities to take into account. They have very considerable freedom of choice.
Fourthly, the hon. Gentleman asked me about lorries paying their way. Our taxation statistics regard heavy lorries as those over 30 cwt unladen—broadly 3½tons laden. For these vehicles as a class, there has been no shortfall between revenue and attributed road costs since 1977–78. In 1978–79, revenue from these

vehicles is expected to exceed allocated costs by £65 million. This figure takes account of the fact that two groups of the heaviest vehicles are not yet wholly covering their cost. The hon. Gentleman referred to that aspect. The Government, however, remain committed to ensuring that all groups of goods vehicles cover in taxation at least the public road cost—that is, the cost of wear and tear and the building of the road attributable to them. That is our clearly stated policy.
Fifthly, the hon. Gentleman asked whether road users get a fair share of the taxation which they have to bear. There are two points here. First, taxation as a whole should cover the cost which road users throw on the community by requiring roads to be built and maintained for them. That is clearly Government policy. But, in addition, they will be asked to contribute an extra amount for the general Exchequer requirements. It is entirely a matter for the Government of the day to decide how big that should be. It could be nothing or it could be a very large sum.
The EEC measures which we shall be adopting to deal with the general problem of taxing lorries fairly divide it into those two portions—the portion whereby one recoups from road users the cost they impose on the community and, secondly, anything over and above that which is a general contribution to Exchequer requirements. When this system comes into being—it is being negotiated inside the Common Market at present—we shall have a clear way of showing people exactly what they are contributing.

Mr. Rathbone: Can the Minister estimate whether that will increase the amount of moneys paid from vehicle excise and so forth, which are used for road building and maintenance, or will it decrease them?

Mr. Horam: It will depend on the costs and revenues as they are assessed at the time in question. Clearly the heaviest of lorries are not meeting their full costs at present. If more taxation is put on them, that will raise more revenue. But, equally, motorists are paying more than their fair costs at present. It would be a matter for the Government of the day to decide what they should do about that. I do not


think one can really answer that question unless one looks two or three years ahead at the figures.
The hon. Gentleman also asked whether we would have TPPs every three or four years. The answer is that we wish to have a graded approach to change rather than the sudden jerks which one would get with a three-year or four-year appraisal. I think that the process of annual appraisal fits well into councils' calendars and ways of working. It is sensible and has been accepted by councils for a number of years now. To go over to a longer period of gestation would not be right. The hon. Gentleman may well disagree—

Mr. Rathbone: The East Sussex County Council for one is very specific on this point. The need to produce annual TPPs relatively early in a calendar year has to anticipate the grants from national Government later in the year. It does not aid the planning of the road programme, either in building or maintenance terms, for the future fiscal year and it adds immeasurably to the administrative costs of running the whole transportation budget. As I instanced in my own few words, there has been a doubling of the proportion of that transport budget which is paid in administration from 10 per cent. to 20 per cent.

Mr. Johnson Smith: Only yesterday I was talking with senior officials and councillors from the West Sussex County Council. They made exactly the same point, and I hope that the Minister will look at it again.

Mr. Horam: We are anxious that any TPP paper or report should not be over-elaborate. We are not anxious to create

paperwork for the sake of paperwork. But this is a system which has been developed over several years. The amount of paper work is not very large.

Mr. Rathbone: Two hundred and fifty pages.

Mr. Horam: That is an exceptional case. I know of some counties which produce a TPP of only a handful of pages. Perhaps East Sussex has taken considerable trouble over its TPP, which is praiseworthy.

Mr. Johnson Smith: And West Sussex.

Mr. Horam: West Sussex as well. Certainly we would not wish counties to be over-bureaucratic about it. I think that the system is now well understood and can be managed reasonably well by county councils.
I was also asked whether we could relax some controls on small matters which are more legitimately the concern of local authorities. We are sympathetic to this suggestion. We have looked at this carefully, and it may well be that there are quite a few things which in future years we can hand over to local authorities, which will mean that more decisions are taken locally by people who best understand the needs of the local community. Indeed, we are in consultation with some of the local authority associations about matters of this kind, and I believe that we can make progress.
I think that we are beginning to make the sort of progress in Government policy which both hon. Members have so clearly and cogently said is their aim.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Nine o'clock,